...
Vendor stability is horrible
You might be able to design it now, who knows whether it will magically *poof* dissapear the next day?
Agreed, if it's for a project that is expected to be manufactured in large quantities for commercial purposes - if it's for a one-off/small run hobby project, I don't think that's a big concern.
Even if the project is expected to be manufactured in large quantities, going with an ARM core is not a bad decision. For microcontrollers at least, design of digital electronics design is not difficult. If you have chosen an ARM core, at least you can port your software, and not have to change the software tools significantly. Changing the electronics design would mean just replacing the microcontroller.
Having said that, I'd not go with AVR myself. If you want to consider cost, I think ST is the best. My personal preference is TI. I used to prefer their DSP's, but recently, have started going with Stellaris. For consumer items, maybe ST and NXP is a better choice, but in my experience, TI fares much better in reliability.
One more option to consider is an ARM softcore in FPGA, but in my career, I have seen many managers/ designers bring it up, but haven't met anyone brave enough to go ahead and chose one in a real project. I've seen a lot of engineering prototypes, but perhaps complexity vs. flexibility tradeoff does not tip the balance towards going with a soft-core.
-pk