We are moving away from this solution as ( like you said ) the arduino is really meant for development, not production.
The Arduino is meant to make development/testing easy. When you have a final product, using the AtMega328 or -1280 or -2560 along with a few other parts on a PCB of your own design is quite feasible. I don't see why you felt the need to abandon a working prototype for an alternative, unless there are things you are not sharing.