Intel tried the low-power x86 with the Atom, didn't really go anywhere. It's true that scaling up an ARM will be equally problematic. But, the point is that they use ARM because they don't want to push the power envelope.
Atom didn't go anywhere because it was a 10W processor benchmarked against 100W processors when running performance tests, but compared to 1W processors when doing battery tests.
It's not really a fair comparison. Atom was an attempt to hug the low-end of the computing market with a low-power CPU for use in netbooks. ARM on the other hand is a smartphone/tablet system-on-a-chip which is in a completely separate performance/power-usage realm. Different design goals, different tradeoffs.
However, Intel found out that the power/performance tradeoffs for the original Atom were not what the market wanted and they've continued to evolve the design. Today there is the "Medfield" Atom system-on-a-chip which is already making its way into smartphones and already giving ARM a run for its money. Given Intel's history and their initial level of success with this first generation SoC design it's definitely far too soon to write off Atom and bask in ARM triumphalism.
