A lesson that people seem to have to keep re-learning, over and over again, is that latency matters a lot on the web. A few ms increase in latency has a measurable effect on your income, as people just close the webpage and click elsewhere. A significant increase in latency is disastrous.
[1] http://users.ece.utexas.edu/~vjreddi/UT/Publications/Entries.... This paper describes a way you can use low-power boxes to get better results for the same cost, but it doesn't involve simply swapping your core i5s with Atoms or ARMs, which is what a lot of people seem to want to do.
[2] One of the major lessons computer architects learned perhaps 10-15 years ago is that the instruction set just doesn't matter that much, compared to the microarchitecture, the manufacturing process, and the quality of the circuit design. Intel has a decisive advantage in manufacturing that's been growing for approximately two decades, ARM doesn't even try to compete in circuit design with full-custom design or fancy circuit techniques, so that leaves the microarchitecture. Although I'd disagree, you might make a case that ARM simply has better architects, and that ARM would produce a better design than Intel if they targeted the exact same space. But, I doubt you'd try to make the case that you'd expect ARM's design to be so superior that it will obviously overcome Intel's other advantages.
Another case you might make is that Intel simply won't target the same space, to avoid cannibalizing their own market, but, in addition to obviously moving towards that space with Atom, they have a history of ruthlessness that makes that seem unlikely.
Intel used to be a dominant player in the DRAM industry, but they killed off their DRAM business when they were a leader in the field, because they recognized that it would become a commodity industry. After becoming a market leader in SRAMs, one of the competitors invented flash; they realized the significance and focused on flash and microprocessors, while, again, killing off what was (then) a major cash cow. It's very hard to imagine Intel just sitting and slowly losing their dominance of the microprocessor industry, ending up with a position like IBM or Sun. They've never done that in the past, so why would you expect them to start now?