Entirely different market 320xx vs ARM (at the time and even now). The simplicity you're advocating as successful for ARM was not applicable for the market NSC was attempting to compete in.
The 320xx, like the 68k, was targeting the nascent Unix workstation market and minicomputer-competition. It was explicitly VAX like -- except simplified (apparently 32xx was quite a clean and consistent architecture). As others have pointed out, it supported everything needed for virtual memory (better than the 68k, actually)
I am not sure ARMv1 (and v2) even had supervisor vs user mode, etc.? (It may have, Google isn't helping me here)
Eventually the 68k ended up in consumer microcomputers (Amiga, Atari ST, etc.) but it started out in that same market. People who wanted to take a bite out of VAX's lunch (which was big money back then.)
The ARM was built by a microcomputer company, for the next generation of their microcomputers. And then for the nest 30 years it was used in various forms for embedded and portable / low-power systems (apart from the ill-fated Archimedes line which was kind of Atari/Amiga/Mac level competition) . It's only in the last few years that we're seeing it in server and workstation class systems.
Note that Apple was an investor and user in ARM from the very earliest days but only in the last couple of years has seen it wise to put it into that class of machine. They went from 68k to PowerPC, and from PowerPC to Intel without choosing ARM for the job, even though they were already a huge ARM customer and had already ported their OS.
Different market, different kind of project.