DSP with Arduino
What is wrong with this picture?
There's nothing wrong with this picture. The Arduino is for hobbyists to learn and play, not for designing cost effective production grade products. If Arduino users can do DSP on their boards, the more power to them. Note that the upcoming Arduino Due is a Cortex-M3 (32 bit, 96MHz, no-FPU); this thing could do a fair amount of DSP compared to older Arduinos.
It's easier for people to approach problem solution in a procedural way than it is for them to think about it functionally. And that's why functional languages, no matter how elegant or "great" they may be, will never really break into the mainstream.
What's easiest is what you're used to. The most popular programming system on earth is Excel, which is firmly in the functional camp.