It's perfectly fine for Apple to consider an ARM Mac. Do you realize that tech companies constantly consider, even prototype, all sorts of stuff? I'm pretty sure at some point they've had an early prototype of an ARM Mac.
Sure, we don't want to break all applications, but developers can always just recompile their code, unless they rely on low-level features, such as byte order, and undocumented functions. It will be some effort to port existing code, but it's not impossible.
Sure, VMware will be broken beyond repair, and we won't be able to run x86 Windows anymore. But Microsoft is considering ARM as well.
x86 is a broken architecture that cannot be repaired. It has so much legacy that half the transistors are there just to support backwards compatibility. At some point you have to give it up for a better architecture. Maybe not overnight, but gradually. It's impossible for Intel to make an efficient CPU with that heritage.
Start by making MacBook Air ARM as a first step, but keep MacBook Pros and iMacs Intel for the time being. That's the only way Apple can achieve good performance and battery life, great cooling in a portable package. We have to sacrifice the old technology.
This will also force Adobe to rewrite their bloated Lightroom and Premier. They've already started doing it in Lightroom CC, and Photoshop/Premier for iPad. Initially it'll be a lightweight version that can improve over time.
Not everyone who buys a Mac needs VMware or Premier. Only a small portion of people use these. I'm one of the Windows developers who need VMware, but it's not like Apple is going to kill Intel Macs overnight. I don't think that's going to happen. And ARM Macs are not going to be iPadOS, they'll stay macOS for a long time.