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""Honestly, I don't need a computer more powerful than my Motorola Droid. ""

But the phone does.

Originally the ARM was a tiny, 30,000gate, cpu core in the corner of the ASIC that did all the phone stuff. If the ARM gets powerful enough it can do all the protocol specific stuff and you no longer need an ASIC. So reduced parts count, quicker development, easier to support new phone standards etc.