Near as I can tell ARM either requires you to pony up big $ for a decent compiler or you need to climb on the learning ramp to use the free ones (a significant investment in effort). But I agree with the sentiment that ARM hardware is price and feature wise a big threat to 8051 et al.

AVR's have their cult following like PIC. For some reason once you put BASIC on a chip, it shows up on all these web pages and magazine pages. Lots of hobbyist use. Is there a good compiler for AVR? Is it still ImageCraft? A good 8051 compiler is not cheap either (Keil for instance) but it's straightforward and dependable. The Acqura ICE is fantastic. The SILabs one "acceptable".

I think it's a matter of learning curve (architecture, tools, etc). Easy: AVR, PIC. Medium: 8051. Harder: ARM. How much work do you want to put in? What is your sales volume?

I'm surprised at the prices quoted for AVR vs LPC. We've been able to put Philips and SILabs into cost sensitive products no problem. Only the absolute cheapest BOM required AVR, and that was an AVRTiny and was laughable from a firmware perspective. A handful of assembly language lines. Same kind of crap you could do with a PIC. Subroutines are a stretch on those beasts! ;-)