LUTs are implemented as a cascade of muxes that are controlled by local latches that are set at configuration time through a scan chain. Scan chains are key to letting you configure all these LUT control latches across the whole chip in an area-efficient manner, but there's a severe time vs area trade-off since you're essentially configuring one LUT control bit (a vanilla 6-LUT has 2^6 = 64 control bits) per scan chain cycle per scan chain. FPGAs already suffer ~30x area overhead for LUT logic compared to equivalent ASICs, so adding a lot of additional area to enable much faster reconfiguration seems like a tough sell. Matrix addressing as used in DRAMs and LED/LCD displays is another sweet spot on the time vs area trade-off curve. Not sure if anyone's ever done an FPGA using that as the configuration topology, but it'd probably make a fun dissertation topic.
It will be interesting to see if Intel replaces the ARM CPU with a variant of x86.
I would expect a Xeon+FPGA to be at a very different price point from the ARM+FPGA devices, it will be interesting to see whether Intel carry on selling ARM ones or also produce an Atom+FPGA equivalent.
Add a million LUTs and several thousand special-purpose blocks (ALUs, CAM, SRAM, DSPs, etc.) on CPU die that can be reconfigured within a few 10k cycles (ie process context), and then future AI-enabled optimizing compilers could incrementally profile and accelerate applications with reconfigurable resources in new, creative and interesting ways. IRAM and similar zillion core approaches are another approach to solve traditional performance locality bottlenecks: distribute processing, interconnect and RAM amongst each other. It makes the most sense to co-evolve such a radical undertaking gradually with compiler vendors and large customers so that support and usability is working from launch, rather than just throwing silicon over the wall and using the "hail mary" method of product (non)design.
PS: Intel could push almost any new on-die CPU technology service/product into the mainstream right now on the server side because of their de-facto monopoly oligopoly dominance. I don't think they will as there is immense organizational pressure to not innovate too much.