You are completely right. In the few cases of dementia I know, people lived just a few weeks after they completely lost memory and awareness, not long term.
Thats unusual, if I'm understanding your description right. Severe dementia (requiring 24 hour care/supervision) lasts a couple of years on average. Even moderate dementia, the level at which people can live in memory care units but have trouble communicating and understanding their surroundings, can last ten years.
You were lucky. Some forms can last several years, and those are not unusual.
What the hell? A slow decline for years is not uncommon at all. At first you know that you are going to forget yourself and be completely helpless, and then you spend years in that state.