The Atari ST was built from scratch in less than 8 months after the deal to license the Amiga chipset fell trouhg. The ST is an amazing engineering feat considering the insane schedule.
I agree on you that the 68k is a terrible CPU for gaming, but it got better when there was some cache added to it, starting with the 68030.
I had an Acorn Archimedes with an ARM 2 clocked 8 Mhz (the same speed as the Atari ST, and 1 Mhz faster than the Amiga 1000/500), it was so much faster than my ST.