I have interesting tales from the trenches to tell. I used to work for a company that did home automation devices. This was quite a few years ago, when the whole craze was in its incipient stages, but I didn't lose contact with it.

I could fill a small book with reasons why IoT products are so bad, but the top reasons would have to be:

1. There is an intense pressure of delivering simply because everyone thinks the market is ripe for the taking and being first offers some kind of guarantee of winning it. Truth is, there is a very significant overlap between people who are interested in this whole IoT crap and people who involved in its development. Most products are so embarrassingly bad that no one in their right mind would want them.

2. Products could be better, but most of them are...

2a) ...developed without any kind of vision, because the management and product design teams don't really understand these things. The vision behind developing most smart home appliances is "we'll make a <insert company's top selling appliance here>, BUT ONLINE".

2b) ...developed by bad engineering teams, because projects are perceived to be too high-risk to be worth investing much into, so they're outsourced somewhere cheap (before you start yelling racism at me, please realize I was one of the cheap guys these were being outsourced to.)

2c) ...seen as little more than platforms for service and/or ads delivery. They see little investment, because management teams completely unfamiliar with hardware design believe the vehicle through which services and/or ads are delivered is pretty much irrelevant and/or can be easily fixed. They treat hardware platforms for delivering ads and services much like they treat web platforms, because that's all they ever built.

3. Standardization in this field is... exaggerated, at best. Even platforms that standardize things at the application layer (e.g. Z-Wave) routinely get it wrong. 90% of the "ground-breaking" gadgets that "open up the exciting world of <whatever> to everyone" only work with five or six phones, at best.

4. The main challenge of every marketing department in this field is coming up with reasons why someone would buy these things. Oftentimes that's done ad-hoc: a device already exists because someone with C in its title had a "strategic vision" and the device is already in beta, and now someone has to figure out how to sell it because the money have already been spent.

5. A lot of big names are in this game pro-actively, in case it actually turns out to be of some value. This is why you see big companies that should know better demoing embarrassing things (like LG's drunken robot). They need to be sure they have a foot in the door in case this actually takes off, but aren't willing to invest the funds needed to provide a serious, integrated system.

6. Testing is virtually non-existent and safety standards are embarrassingly lax. Half of the things that plug into a socket and do fancy Internet things are fire hazards.

7. Virtually every device that does fancy Internet things is a privacy and security hazard. Companies either lack management and development teams that realize how important these things are and know how to build them, or are actively disinterested in fixing them because it's detrimental to their business model.

The true "smart home" won't come until all these funky devices will be integrated in a single system. With everyone competing and raising walled gardens because they don't want to share profits from ads, that won't happen until a big enough player decides to invest the huge amount of money that's needed to create a comprehensive line of devices, that can cover everything from thermostats to sound system.

Until that happens, "smart" homes will be so incessantly dumb and annoying that no one who isn't paid to say they're awesome or build "smart" devices will want one.