I'm very interested in knowing the power consumption and more importantly, the operating condition. 32kB flash and 4kB SRAM do not sound a lot. I've the same thought as Daleste. For the application areas mentioned in the article, I feel like 16bits might very much be enough.
In my opinion " Why does it need ... ?" is the wrong question. I prefer the "Is it more economical to ... ?" pattern.
One big cost driver here in Europe and I think also in the USA and Japan are human resources. The big human resource specific advantage of the ARM eco system is, ARM M*, R* and A* all share the same ISA concepts and the same tool chain. As a result teaching/learning efforts are minimized.
If you were designing a single product for today, then 8 or 16 bit may be fine. If you are starting out in the architectural decision stage of a project targeting Internet connectivity of some sort, then would you really want to have the potential to be hobbled by an 8 or 16 bit architecture?
Comparatively, a 16 bit architecture is going to offer limited code advantage over 32 bit ARM and with expected die shrinks over time, that pretty much goes away.
With 8 bits you will be quickly running into performance issues not to mention limited off the shelf support in terms of software IP (stacks, etc.)
Add in potential time to market advantages from common tool chains and you have what is likely the best architecture for the targeted market.
The hard thing about IoT, one Berkeley researcher told me recently, is that many of the systems address Luddite markets where they are replacing mechanical or no systems at all--a hard sell, and a more fragmented market than even the so-called catch-all embedded sector.
This will take time and hard work.
In India IoT market is currently growing well and most of the chipsets we use here are either from TI or from chinese vendors .... Freescale does not have potential network in India and their support quality is also very low .... It's very doubtful if this chpset will get considerable amount of Indian market .....
The issue of power consumption is a tricky one and it depends on what one employs as a system, whether using the one above or others like i.MX283 also from Freescale. If the IoT is deployed / configured using ZigBee, the battery life is in years; in days for Bluetooth and in hours for WiFi!
Typical WiFi 802.11/a/b/g/n versions will restrict to nodes in IoT within a 30m reach node-to-node; one can always have router nodes in the mesh and extend its reach but it is impractical for outdoor & low data applications (like weather / infrastructure health monitoring).
For ZigBee, Freescale has MC1322x SoC which I believe consumes sub mW power in sleep mode /quiescent state.