Imagine you bought a silver mine for $1 billion. Then imagine you hire workers to work the mine for $1 million per day. Imagine that at first, the mine has lots of high-quality ore so it doesn't take as much effort to produce silver, thus you get $10 million per day. Imagine that every 3.5 days, the returns drop, say, 1-15%, because the quality of remaining ore is getting worse and worse.
This is where mining stands today. Difficulty keeps going up (albeit not in a straight line, it has ups and downs) = ore grades dropping. Workers must be paid = electricity costs. The silver mine = your hardware specifically purchased for mining, but not including the cost of any hardware you would have purchased even if coin prices were zero.
ROI = return on investment. It's easy to see that if you bought a mine for $1 billion, you will never make your money back if you make $10 million per day and the average difficulty increase is 1-15% per 3.5 days.
Similarly, you can plug in your numbers at http://bitcoinwisdom.com/litecoin/calculator and set difficulty increase per increment to something realistic. http://bitcoinwisdom.com/litecoin/difficulty Then click on Month to see how long it takes to pay back the hardware. If your electric prices are 10-15 cents, it would take only a 2-4% increase per difficulty increment to make it so that a $400 7970 will never pay for itself assuming constant prices.
Now, if you think prices per coin will go way up to make it feasible to make more than what you put into mining, why would you buy the silver mine in the first place? You are better off buying silver coins directly and simply holding them. If you think prices will go up slowly, or go down and then up, or go down and down some more, it may still be better to mine than buy and hold. But timing financial markets is very difficult, and most people do worse than random chance when they try to time the stock market.
Ask around on any cryptocurrency forum and you will hear the same: buy and hold is more profitable, mining is profitable as well but requires way more money up front and more headaches. Historically it's been 10-20x more profitable to simply hold onto coins for long periods of time (more than a year). Some people are fearful about buying coins directly because "omg what if coin prices to go zero," but miners get screwed too if coins go to zero, since miners have to put up WAY more money up front to make the same profits as buy-and-holders, and keep paying for electricity every day as well. There are definitely scenarios where longtime miners would be worse off than someone who bought-and-held cryptocurrency directly, like if you bought a bunch of expensive gear and mined for a year and then the coins went to zero, you'd have a bunch of depreciated hardware and a ton of power bills. The least risky way to get around this is to sell coins off immediately as you mine them, but then you will have a lot fewer coins if prices do go up. And even if you sell-as-you-mine, the way difficulty is going, if prices don't go way up, a new card now is not going to pay for itself (see above, a mere 1.7% increase in difficulty per increment makes a $400 7970 unable to pay for itself at 15 cents/kWh).
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