Developers don't want to spent time setting up an entire LAMP environment. There is a reason why Django and Rails are doing so well and that is it is extremely easy to start development and start testing. With SQLite as the database you don't have a need for a full DB to start developing.
Being able to launch a quick server to do testing is absolutely fantastic. I use poole.py for my site (to create a static portfolio website) and I use its built in web server to view my changes before committing them and pushing them live.
If PHP development became as simple as launching a quick web server just like in Python or Ruby I might once again take an interest in it, at the moment I am just not too interested in working on it, as either I have to set up and run Apache with mod_php on my local machine or I need to set it up on a remote machine, and then files are no longer local, and testing becomes a deploy/test cycle instead, or I am editing files remotely over a possibly slow SSH session, or having to FTP them on save.
No, a built in web server in PHP that does the handling of requests would be absolutely fantastic. Having a simple web server doesn't have to add much bloat at all, it isn't bloated in Python or Ruby either. Look at publicfile [1] for an extremely small web server, look at the examples in libevent [2]. A web server built into PHP only has to do the bare minimum, serve requests. It doesn't need all of the functionality that Apache has. It isn't meant to be used in production.
[1]: http://cr.yp.to/publicfile.html
[2]: http://monkey.org/~provos/libevent/ see [3]
[3]: http://monkey.org/~provos/libevent/doxygen-2.0.1/ (Event Driven HTTP servers)