That makes sense... So only a few apps would be emulated. Since it can only run apps from Windows Store, all apps would need to pass some certification to get in there, and that would probably include some optimizations for ARM emulation. But then those apps essentially become ported apps, just with a bit worse performance and requiring a bit less work from the development. And in the end, the whole platform is yet another Windows RT, just with more (ported) apps. At least that's how I'd imagine it... With this assumption, Windows 10 S makes much more sense. Except that I still strongly doubt about its success... I think the right way to go is to close the gap between desktop computers and ultraportable devices, which Microsoft was quite successful at with Windows 8 and then 10... But this step would basically widen the gap, because they would introduce laptops with limited functionality, quite far from desktop computers.
Ideally, one would expect that it would fill Windows Store with apps and that all people, including desktop users, would be happy with it. But let's not forget that desktop computing has deep roots in business, industrial and other markets where "old" programs are still needed and are often maintained by just one or two persons, or not being updated anymore. You can't expect everyone to port those programs over, or even if they didn't need to do any porting, you still can't expect them all to get Windows Store developer licenses, sometimes it's just not worth it. Some apps don't match Microsoft's requirements, but that doesn't mean people don't need them. Sometimes there are no alternatives.
And you know, there is a connection between everything. For example, if people work with full Windows at their job, they want to have at least similar environment at home. They want to run the very same software on their laptops, tablets, maybe even phones, who knows what will happen in the future. But the point is, it's not a terribly smart idea to create a divide between "full" and "S" versions of Windows like this. That way one of them will have to become a niche product.