Microsoft has long said that Windows on ARM will not include an x86 emulator, so legacy applications would never run directly on the platform, but there was always the possibility that existing desktop applications could be recompiled. That option is now unambiguously eliminated, with Microsoft saying "WOA does not support running, emulating, or porting existing x86/64 desktop apps." Office is a special, unique case.
My bet is that the only reason the legacy desktop exists in Windows 8 on ARM is because Office couldn't port their software to a touch-friendly Metro UI before the release, and we can't bear to sell a computer that can't run Office. I think Microsoft cedes a lot of either competitive advantage or user simplicity by not going all-in one way or the other, and I think the iPad benefits.