I don't think x86 compatibility mattered. When it launched in 2001 it was supposed to replace HP's PA-RISC architecture which is totally different anyway. Sun and its SPARC processors were very much alive, Google was only three years old, and AWS was five years away - the idea that a massive array of cheap x86 processors will outperform enterprise-class servers simply hadn't occurred to most people yet.
Of course, the joke is that cheap x86 processors did outperform Itanium (and every other architectures, eventually).
Of course, the joke is that cheap x86 processors did outperform Itanium (and every other architectures, eventually).