Coincidentally I've also thought about creating a "better x86", but in the opposite direction: on the basis that segmentation is extremely powerful and useful, I think it would've been better for all the various virtualisation extensions to be based on the same model that V86 and protected mode started: segment descriptors of different types. That would allow V86, 16, 32, and 64-bit (using "double-wide" descriptors, to allow a 64-bit base and limit to fit) protected mode "tasks" or VMs to coexist completely, and the OS to switch between them easily. There are enough reserved spaces in the existing specification to allow these to fit nicely (in fact, what I came up with fits so neatly that I wonder if Intel had originally envisioned them for this purpose, if AMD hadn't beaten them with AMD64.)
Instead, now we have partially-backwards-compatible (and even slightly different) AMD64/Intel64 and at least two non-interoperable virtualisation extensions (AMD-V, VT-x).