We are already headed in that direction with x86-based CPUs.
AMD Fusion is the best example of ARM-like power consumption w/desktop-like performance with Atom + Intel HD 3000 in second place.
The only problem with Atom is that it executes instructions in-order but it has excellent performance per watt. It seems like Intel could easily alleviate this issue by just giving it branch prediction or whatever its called.
Besides, I don't expect to run resource intensive programs like Photoshop, 3DS Max, and Visual Studio on my tablet PC.
To echo what AMD is saying, we have reached a sort of singularity with CPU performance in the desktop space. With that in mind, I don't see any more room for a competitor like ARM especially since we don't know how efficient it can run x86 instructions and there is no way it will beat the juggernauts at their own game.
Nvidia is not allowed to use the x86 instruction set due to licensing restrictions.