Flat memory was a better idea but it wasn't a cheaper idea, and cheaper beats good. A casual Googling shows a price of $2,880 for a IBM PC in ~1982 dollars versus $8,900 for a Sun Microsystems Sun-1 with a MC68000.

That was just Sun's market segment.

Also from a casual Google, an IBM PC launched in 1985 (picking the XT 5160-078 as an example) was around $4,995 at launch. Compare that to two 68000-based computers also launched in 1985: the Amiga 1000 launched at $1,295 and the Atari 520ST launched at $600.

These computer system prices - Sun, IBM, Commodore, Atari - came from the market segments the manufacturers aimed to sell to, rather than a cost saving enabled by cumbersome memory models.

The cumbersome memory model is just a historical accident; the 8086 designers wanted 8080 backwards compatibility so they could sell to former 8080 users, IBM did not require this. IBM would've picked the 68000 had it been "production ready" at the time, they did not reject flat memory on cost grounds!