x86 does have its problems, but a lot of PPC and IA64 supporters honestly couldn't tell you what these problems are, only that they exist. The PPC supporters are especially guilty of this.. not to say that the latest PowerPC processors are nothing special (they're really quite nice), just that Apple fanboyism often leaks over into architecture.
If you ask me, we're past most of what made x86, well, suck. Modern x86 CPUs are really just RISC in sheep's) for the most part, and the only reason x86 is said to drag us down is that CPUs basically have to translate x86 instructions into an easier-to-digest form (basically/semi-incorrectly: CISC to RISC, stupid to smart). Do we lose some speed doing this? Sure! Do we lose enough that we need to go through making an entirely new architecture for PCs? Well.. maybe not. The trouble isn't so much designing the new architecture, really. The engineers doing this probably find it fun. The trouble is that you have to tell the market "hey, we're going to break compatibility with everything out right now, but look at it this way-- if you buy all this expensive new hardware then run the expensive software coded for this new architecture, you'll get a moderate speed boost over the old hardware!" Who out there is going to say "ooh! Me first!"?
There are more.. delicate ways to handle this situation, of course. Ace's Hardware went over it in that Kill x86 article of theirs. It may not be the easiest thing in the world, but it would be relatively painless for the market. The point is that these light-handed (on the "market treatment" side, nevermind the poor engineers who're told that they have to make a CPU that's effectively two architectures in one) ways of introducing a new instruction set / arch were not the ways that Intel chose.
But I digress, a lot. Let's assume that Intel somehow make the Itanium 2 emulate x86 code at a reasonable pace. Now you just have the issue of getting it to the market, right? Surely that's all? No, sadly, it isn't. The 1GHz LV Deerfield puts out 62 watts of heat over a 180mm^2 die. Does that sound familiar? A die the size of a farm animal, power consumption in the low sixties? Why, that's what the 130nm Opteron 246s look like. Except they're a lot faster than 1GHz Deerfields, even with this horrible "maintaining backwards compatibility" deal, and even running in 32-bit mode only.
But that's not really fair, is it? The 1GHz Deerfield is awfully slow. It's an LV part, after all. But that brings me to my other point: the LOW-VOLTAGE part puts out 62W of heat. Even someone a few crayons short of a box (someone such as myself, I guess) can see that you might just have a few heat output issues with the non-LV parts. Huge die or no, that's a lot of heat to dump into a PC. And what do you get out of it? Something maybe as fast as an Opteron that, if market adoption suddenly grew by an ENORMOUS amount, might not cost TOO much more.