I think it's wrong to say that no Arthurian story is pre 12th century. First of all, Nennius. Although his account is "suspect" and he "placed his 'Arthur' in a historical context which did not fit him," this is irrelevant, as so did every later writer about Arthur. Granted, it's not much of a story, but it is likely that stories about Arthur existed when Nennius wrote, or he would not have written about Arthur at all.

Next, we come to poems like Preiddeu Annwfn, which presuppose stories about Arthur, and have been dated by most scholars to before the 12th century, and by very few to later than the twelfth century (some place Preiddeu Annwfn IN the twelfth century, however).

There are also two, not one, famous references to Arthur in the Annales Cambriae, ca. 970, which presuppose stories about Arthur at both Badon and Camlann. These are year 72 (519?) and year 93 (540?) It is interesting to note that every other figure mentioned in the Annales, besides Arthur and Medraut, is a historical figure who actually lived; the Annales is not a whimsical compilation of legends.

Finally, Geoffrey. Geoffrey wrote of a very ancient book in the British language which he used as a source, and although the book has not been found some candidates that are known to have existed at one time have. Geoffrey specified that the book had been given to him by Walter of Oxford, a respected priest and scholar at the time, and specified his sponsors, etc. So to lie about this would put him at extreme risk of discovery, and of discrediting important people. Finally, another historian contemporary with Geoffrey, Geffrei Gaimar (who wrote in Anglo-Norman) cites a book given to him by Walter of Oxford, which is almost certainly the same book in the Latin translation Geoffrey made of it and gave back to Walter (Walter, by the way, read and wrote Welsh, so Geoffrey cannot have falsified his translation and gotten away with it). It is virtually certain given all of the above that the Book in the British language really existed, and it is likely that stories about Arthur were in it (though embellished profusely by Geoffrey).

So the upshot is, while it's true that no story in a complete form survives from before the twelfth century, clearly Arthur was a character in Welsh stories before that time. I know it's a fine distinction between "there are no stories" and "there are no stories which have come down to us," but it's an important one. Geoffrey did not in any sense invent Arthur, though he did embellish greatly many of the stories that were there.