alt Hacker NewsThis interview with Allen Baum seems to imply that DEC was quite aware of what could easily be done with Alpha, and what could not.
I'm also assuming that ARM code density was better than Alpha (conditional opcodes being a major contributor).
"Well, we were looking at doing a low power Alpha and decided that just couldn’t be done, and then looked at the ARM. We think we can make an ARM which is really low power, really high performance, really tiny, and cheap, and we can do it in a year...
"Well, I worked on the StrongARM 1500, which was a very interesting product. It was an ARM and a DSP kind of highly combined... And then we finished that project and our group in Palo Alto, we were just gonna start an Alpha project."
https://archive.computerhistory.org/resources/access/text/20...
An important thing to consider is that DEC simply didn't have enough CPU design teams, which is also why Alpha essentially had only one-and-half model in the works throughout its history - and the half came from smashing smallest chipset variant into single chip with the CPU for pretty bad performance (too slow memory, mainly). A low-power Alpha CPU would have to be a from scratch design, even if arguably simple to implement ISA-compatible chip.
StrongARM was developed in partnership with ARM, not starting from zero, applying some of the techniques Digital developed with Alpha to ARM - reputedly creating the idea that ARM could be fast at all