Drop the "rational" to avoid that baggage, and the argument is certainly valid.

It could be a winner takes all if it was a huge technical hurdle to move many x86-based systems to ARM and back. But it's likely never been easier, and a lot of software already works on x86 and ARM. Unless x86 can consistently perform better for less power consumption and price, there will be competition.

There's aren't any big architectural reasons that x86 would need to be less power efficient. Intel already had a go at that side but very few people bought the low power server chips (Avoton etc). AMD also hasn't had much luck with low power server chips (see SeaMicro etc).

One big reason is that halving the CPU power consumption doesn't nearly halve the server power consumption, but it often goes pretty close to halving the system performance. And CPUs are pretty efficient at idling so you're really only paying for the power consumption when there is work to be done - instead paying for larger fleet of reserve servers. And of course scaling to more but slower servers means a lot of expensive software/admin complexity.