Yes, yes, and yes. ARM designs good CPU cores and does so inexpensively, no doubt about it. At the risk of sounding contrary, the real race isn't between Intel's budget and ARM's: it's between Intel on one side and ARM, Apple, Qualcomm, Samsung, NVIDIA, Texas Instruments, and more (AMD is my favorite dark horse) on the other. Apple alone has bought multiple chip design companies, and probably a whole company's worth of engineers from the formerly-ATi side of AMD. I think that's why their phones cream their competitors (or all ISA flavors) in the aforementioned examples.
It's true, ARM will continue to increase it's R&D investment now (which is really their whole budget), but that investment will increase more slowly for awhile, the company is trimming its hiring plans for the rest of 2012 amid concerns about a potential sales slowdown in the second half. (Intel is trimming, too, it's more macro economic than anything else.) But I maintain that ARM Holdings vs. Intel is only a small part of ARM vs. Intel
It has taken Intel an enormous effort to get as far as it has in the mobile space, which isn't very far (yet). I have no idea what Intel is making on mobile CPUs, but it's not selling many of them at this point. It's going to keep trying, though. Intel knows that ARM is now where Intel was when Intel beat up IBM and took IBM's lunch money, so they're not going to stop. I think it's going to stay interesting.
I hope we get to talk more about architecture some time.
That's a good point. ISA goes beyond instructions and also defines the memory and interrupt models, which Atom must then emulate as well. I'm not an expert on the interrupt models, but if I recall correctly, ARM's can be implement more easily and with less power, so Atom loses there. But, to my knowledge, it's still not a large difference.
You're right that iPhone 4S creams Medfield reference in battery performance benchmarks, I'm looking at the ones on AnandTech right now. But the iPhone 4S creams other Android smartphones, too, so it's not just the ISA. Many of the android phones compared in the XOLO review (and the newer ones, too) do about as well as the Medfield reference design in the normalized power charts. AnandTech doesn't include all of the phones in the review in the later link, so you have to tab back and forth. I'm not going to demand that you call the Atom stellar, but its deficiencies are (I think) removed from the ISA and CISC vs. RISC at large.
ARM ends up being several times more efficient [...]
is wrong in the general case, at least when you look at an SoC or even core level. Some ARM-based SoCs are more efficient than Medfield, but none are several times more efficient. Your comments in this thread about Intel having a 4-to-1 size advantage with its transistors are also wrong, Medfield and Clover Trail are both on 32 nm, both launched (or are launching) after Qualcomm's high-end stuff on TSMC 28 nm, and Samsung's high-end stuff on their own 32 nm process. If Atom were on 22 nm FinFETs and losing to TSMC 40 nm, that would be embarrassing but that's not the case. Atom core has its own shortcomings but they're not really ISA-related.
Anyone can make an omelet with eggs. The trick is to make one with none.