May not be as efficient, but development time is currently a much bigger issue. One thing is clear that Nokia wasn't able to release competitive products based on Symbian on time in the past.
Despite all the delays Nokia faced with MeeGo, other companies have proven that you can release competitive linux based devices in a timely manner, even if you are a small business. (routers, phones, ebook readers, gadgets etc.)

Now that people want more and more from their featurephones, linux could be a good choice on the low-end, without the need to develop an app ecosystem.

Calling Android "dumbed down linux" is a gross simplification of the situation. Also if the applications on Harmattan are correctly optimized, there is no need that Harmattan would require "more juice" than Android or vice versa. You are correct that code that is "closer to the metal", can be more efficient when looking at CPU performance, and thus battery life. But in reality in most situations, the difference is small, and in current Android versions you can also use native code when it does matter.