On the other hand, trying to setup a typescript monorepo with shared/dependent projects is a huge pain since everything needs to be transposed to intermediary JS that severely limits or breaks tooling.

Even TS project references make assumptions about the contents of package.json (such as the entry file), or how the compiler service for VsCode preloads types from @types/ better than for your own referenced projects, which sadly ties TS to that particular ecosystem.

Language version compatibility is a good point, but perhaps TSC could respect the compiler version and flags of each package's tsconfig.json, and ensure compatibility for minor versions of the language?

Since I enjoy working in TS I'm willing to wait it out as well, the pros far outweigh the cons. Now that GitHub/MS acquired NPM, I have hopes that it will pave the way to make TS a first-class citizen, though I don't know if Deno will be part of the solution or not.