[rtpg]

Because the hardware clones are not sufficient. You need to make a sort of menu system + deal with hardware connections.

Simple ARM chip + software emulator means you could just do everything one one chip without headaches. Plus it'll likely be cheaper.

[pjc50]

Those are usually rolled into the hardware clones in various ways. e.g. https://en.wikipedia.org/wiki/C64_Direct-to-TV (single chip ASIC C64)

It could be software emulation, but that's slightly less reliable, and has a boot time which may not be negligible.