All the projects I did with arduino could have been done with the pi. Some even easier to code because I could have used python. So when a full microprocessor based PC is cheaper than a microcontroller why wouldn't you use the better option. Again, I know there are certain things a microcontroller excels at, but most people don't use their arduino for those things.

Now if the arduino was 10x cheaper, the entire value proposition and application space changes.