Tom,
You are misunderstanding an important element of autosomal matches, and because you misunderstand it you are reading what you think I'm saying rather than what I'm actually saying.
There is no doubt autosomal DNA washes out after ABOUT 5 generations. And there is no doubt the piece inherited from each ancestor decreases by ABOUT 50 percent each generation.
Those two things are not contradictory. Here's why.
You certainly get 50 percent of your DNA from your father and 50 percent from your mother. But! Recombination is random. After that it's all probabilities. You probably get about 25 percent from each grandparent, but the percentage isn't exact. At the extreme, is is possible to get 50 percent from your mother's mother and 0 from your father's father. The probabilities are against it, but it could happen.
Same with your great grandparents. Odds are you got about 12.5 percent from each one, but in practice you might get much more or much less. And if you get more or less, it's possible your parent or grandparent also got more or less. But not necessarily. Because it's a crap shoot.
Once you understand this basic concept you can easily see what's wrong with your argument that FTDNA guarantees the accuracy for 5 generations, then drops to 50 percent certainty.
No, no, no.
FTDNA doesn't know HOW you are related to your matches (unless you tell them). FTDNA isn't dropping their accuracy estimate because it's past 5 generations. Absolutely not.
What FTDNA is doing is something very different. They are GUESSING your relationship to someone based on how much DNA you share. If you share enough DNA in large enough blocks, they'll guess, say, that person is somewhere in the range 2nd Cousin - 4th Cousin. And, if they share that much DNA then FTDNA will put them in one of the relative buckets -- Close Relative, Distant Relative, whatever.
My weakest match in the Distant Relative bucket is a predicted 3rd Cousin - 5th Cousin (total 59 cM, largest block 13 cM). FTDNA doesn't have any idea if we're really relatives, but if we match that closely it's safe to guess we probably are.
If you don't share a certain threshhold of DNA with someone, FTDNA will put that person is the Speculative Relative bucket, and guess that person is something like a they are something like 4th Cousin - Remote Cousin or a 5th Cousin - Remote Cousin.
My closest Remote Cousin is someone with a shared total 71 cM, longest block 11 cM. My most distant Remote Cousins is someone with total 53 cM, longest block 9 cM.
Do you see the difference here? FTDNA is predicting accuracy based on a certain number of generations. Instead, they're doing it based on genetic distance.