There's no technical reason a Lisp processor couldn't have followed the same development path as workstation/PC
processors and kept up, but it didn't have the volume to
sustain the development effort.
The competitor LMI was also developing their next-generation Lisp machine RISC processor: https://en.wikipedia.org/wiki/Lisp_Machines#GigaMos_Systems
More about the latter: http://fare.tunes.org/tmp/emergent/kmachine.htm
LMI manufactured prototypes of their CPU, but these were older technology - not microprocessors, but VME-board sized CPUs.
Xerox mantioned that they were developing a Lisp RISC, but it never surfaced. The SPUR project designed a Lisp RISC Chip: ftp://ftp.cs.wisc.edu/markhill/Papers/jsscc89_vlsi_spur.pdf
IOW, the architectural benefit for Lisp machine weren't enough to overcome the benefit offered by Moores law. Today, things look different but it would be a much harder sell to push Lisp or any non-C launguage.