I don't see why MorphOS can't run on ARM...

There is a point where native development takes over. Running an m68k emulator - well, this has been laughed at by many people for being an absolutely pointless technology in this day and age. Trying to stick with PowerPC - I don't see anyone making PowerPC systems anymore.

Since the vast majority of exciting apps on MorphOS seem to be open-source, SDL ports or at least native PowerPC compiles, there's no reason it can't be moved away from PowerPC. It may clean up the API to throw away the m68k legacies, it would certainly clean up the calling conventions and weird little hacks to try and keep m68k apps happy.

With appropriate documentation for the kernel and libraries available somewhere (someone break out TeX :) it could do quite well as an alternative, open-development system with more affordable licensing and a distinct focus on multimedia and gaming etc.