Can this work?
Hmmm. The Intel x86 architecture contains an awful lot of historical and upwards-compatibility cruft that an ARM core does not. Surely this means that it'll always either consume more power, or be slower, than an ARM-based system of equivalent performance. In the mobile arena this will translate into Atom handsets being heavier than ARM-based ones, or having shorter battery life.
I really can't see x86 compatible CPUs catching up in the mobile world.