I would imagine that intelligent people would have worked at getting the same problems solved in a different form.
[edit] Instruction Sets from Intel, IBM, MIPS, Motorola would have been really different. Personally, I wanted the Forth machines to rule :)
Here is a video which shows it running on a TI Micro Explorer, a Nubus Board in a Mac II.
The tradeoffs may or may not have been worth it, but there seemed to be an obsession with doing it Right rather than doing it cheap and quick. Even today it would be financially beneficial to buy a $70k workstation over a $2k workstation for a developer if there was a significant boost to productivity; each developer costs you well over $70k per year, and you can't double your productivity by hiring twice as many developers.
What I wonder is why for 20+ years there was no successful free software project that would mimic the Lisp Machines.
In the fullness of time, long after 1963, 18 bits of 36 bit words totaling 1 MiB of 9 bit bytes was crippling, but that much memory was at the time unimaginable. MIT's proposal some time later to have a full address space of memory built was a big thing, some said it couldn't be done.
Which gets into one big difference between Xerox PARC Altos and their software and UNIX(TM) for the first decade or so: they were seriously constrained by memory. Altos were 16 bit machines, also word addressed, so a total of 128 KiB, although they had a bank switching feature. The bigger PDP-11s had a split Instruction and Data (I&D) feature so that a program could have 64 KiB of code, and due to the MMU, 58 KiB of data and 8 KiB of stack, also for a total of 128 KiB, although you could get fancy with overlays as BSD 2.x did to support TCP/IP.
I believe this resulted in significant differences in software and system design, e.g. part of MIT's going for The Right Thing was using systems with large (for the time) address spaces. Whereas the smaller systems PARC and UNIX systems required more compromises, although occasionally that had good results, e.g. UNIX pipelines and the conventions that developed from them.
A more interesting alternate history for me would be if the folks doing system research had settled on a functional language like Haskell rather than a procedural one like C, what would our APIs look like today. I say that because I suspect that using C as a the language of choice was more influential than the OS of choice.
* Interlisp-D from Xerox were smaller machines, networkd with a server + printer. PARC developed networked collaborative software for them, the first remote GUI was written for Interlisp, the first IMAP client was written for Interlisp-D, ...
* the MIT Lisp Machines were developed with CHAOS, an Ethernet-based protocol. TCP/IP was available early. Many of the TCP/IP protocols were implemented for them (often client and server): chat, terminal, mail, RPC, NFS, X11, DNS, HTTP, remote printing, remote booting, ... They also ran DECNET and some IBM network protocol. Actually the networking code from Symbolics was quite sophisticated in some respects...
BBN (the Internet company at that time) also used a lot of Lisp Machines. They had some distributed remote object networking substrate, which also ran on Lisp Machines.
Lucent had developed an ATM network switch, which first versions were based on multiple embedded Lisp Machine boards for the switching code and another Lisp Machine for the control and administration. They ran all kind of fancy networking code on them in a zero downtime fashion with live software upgrades. They were for example thought as large network and telephony switches.
I preferred the MIT lispm environment better because I grew up with it. For a while I had a job where I had both a dandelion and a 3600 in my office; later I had two 36xx machines, one with a color display.
They were pretty fast for their time. The late, hyper-dynamic window system was probably too heavyweight for its time, especially when later translated over X, but I generally used the simpler base window system because it was faster.
It was the most productive (in terms of amount of useful code generated per unit time) system I have ever used and I still miss it. The Interlisp D, though quite different to use (and in some ways better), is a close second.
They were not used for networking research, AFAIK, but Lisp Machines were definitely very well networked, speaking many protocols which soon came to include IP and TCP (though they started out with MIT's CHAOSnet). I was using Lisp Machines (both Symbolics and TI) networked with Sun 3s in the mid-to-late 1980s, and they definitely interoperated.
But I think that was a few years later than the networking research you're referring to, that created the Internet protocols.
Or maybe another thing like UNIX would've replaced Lisp Machines quickly.
And something like Gopher.