There are already several significantly more powerful ARM Cortex-M3 boards available for around the price of an Arduino[0][1]. The draw of the Arduino is ease of use in interfacing to GPIO/UART/i2c and in the community of accessories, documentation, and code that exists around it.

[0] http://shop.ngxtechnologies.com/product_info.php?cPath=21... [1] http://www.sparkfun.com/products/8559