A ton of ARM hardware is embedded cores running VxWorks or EmBed. M0 through M4. Yes, Phones are the dominant core consumer here, but there is a whole bunch of embedded/IoT stuff shipping ARM cores every day that will never see Linux installed.
Right up until you see someone run Doom on it.
Though you are correct, a lot of abstraction today makes things portable in ways that in the past they were not. The abstraction has a small performance and memory cost which wouldn't have been acceptable now, but today it is in the noise (cache misses are much more important and good abstractions avoid them)
This is not true, compilers don’t generate super-optimized asm output from C. It’s actually not that optimizable because eg the memory access is too low level so there are aliasing issues.
But optimizing doesn’t actually help most programs on modern CPUs so it’s not worth improving this.
Proprietary software is probably the main reason we haven't had a whole lot of diversity in ISAs over the past couple of decades (see: Itanium). It's no coincidence that ARM's mainstream explosion is tied to Linux (be it GNU/ or Android/).