I think that's got to be right, although one line of argument seeks to view all of the pre-Geoffrey material together. If things like the battle list or the reference in Y Gododdin are seen as part of the wider corpus of earlier material rather than being made to stand on their own terms as potentially historical nuggets, devoid of wider context, they start to look rather more folkloric.Without further evidence then it seems the "person" around whom these legends coalesced must remain unknowable. He may have existed or may not have done so, and we cannot really say more.
I'm inclined to see it as more likely than not that he never existed, but that said, I don't think his historicity is the most interesting thing about him. In the context of this thread, what is interesting is how totemic he has become and how important it is for so many people to find him. Arthur's elusiveness appears to exert a powerful draw, much like the Grail, Atlantis, grey aliens with almond shaped-eyes or (perhaps more appropriately in the context of Arthuriana) the Questing Beast.