Well, only you can decide how much money you want to spend, but here's the Tom's GPU hierarchy chart: http://www.tomshardware.com/reviews/gaming-graphics-car...
Anything you do in the range you're talking about is going to be a massive improvement. You're right that value decreases at the very high end. The 7870 is a pretty great deal, yes, but you can go lower if you want. The 7850's a better value. You'll have to decide somehow where you want to draw the line.
It's good that you're running the 2500K, as it's a powerhouse, but you should do some overclocking if you do a serious GPU upgrade. How's your case ventilation/heatsink setup right now?
You do have a choice of possible cards that will give you "Excellent 1920x1200 performance" e.g. 7870, unless you're going to change your monitor soon. The final choice is your's but you won't go wrong using Don's/Tom's recommendations.