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As far as I can tell, it's an economics problem.

The big consumers of FPGAs don't care if the tooling is terrible, because they're coming from 80s development environments and practices and can afford to dedicate 50-person teams to the job function.

Smaller companies won't touch it because it's terrible, and the vendors won't improve it because there's no demonstrated market for improvements.

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Sounds about right. I guess the market economics don't work out for a simple design (i.e. with not much IP revealed by open sourcing the spec) that can be programmed with OS tools. I mean, there's these ICE chips, which is a huge step, but realistically I'd want something just a tiny bit bigger and with a hardcore (ARM or MIPS) in it.

Or maybe the market economics work out, but are small relatively compared to the big players, so it moves glacially.

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