Bigger processors with more RAM have always been available. The question has always been whether you're going to use a $20 processor when you could do the job with a 50¢ one. It's the difference between your product being cheap and disposable, and you getting to choose your margin based on your strategy; and not being able to move a unit without losing money, hoping to sell yourself to someone who knows how to do more with less.
I'm an Erlang fanatic, and have been since forever, paid for classes when it was Erlang Training & Consulting at the center of things, flew cross-country to take them, have the t-shirt, hosted Erlang meetups myself in downtown Chicago. I'm not prototyping a microcontroller application in Erlang if I can get it done any other way. It's committing to losing from the outset.
edit: I've always been hopeful for some bare-metal implementation that would at least almost work for cheap µcs, and there have been promising attempts in the past, but they seem to have gone nowhere.