If MKT were to be released on 360 I'd get it just to have it without loading time. I'd imagine if they were going to go through with putting it on there they'd back up the quality to arcade level but that alone leads me to believe it'll never happened.
Also, the only time "arcade released" games mattered were on Midway Arcade Treasures. In the case of XBLA, I think the arcade part is in reference to the program/promotion of sorts, as in, it's a live arcade of games, not a live place to download arcade specific games.
I think MKT or MK4 would be the next logical game to release but they would need serious gameplay patches that would never happen.