The scanout-time hardware was often less useful that you might think - only in dynamic scenes where the GPU is otherwise idle (like playing video possibly with a static UI overlay was the premier use case).
For static scenes it's more efficient to render out to a buffer (using the GPU as the scanout overlay pipes often had limited feedback capability) and just output that using overlays disabled. It didn't take many frames for that to be worth it.
For apps that were animating or otherwise updating it's window, most UI toolkits used the GPU for widget rendering. And often the scanout pipes didn't hook into the (relatively large) system caches like the GPU did, so there were times it was again faster to composite the screen on the GPU to a single scanout buffer than flush already cached data, the get the scanout hardware to read it back from the memory bus.
And there weren't as cheap as people thought - one stat I remember was that the total area of the GPU on the omap4 platform was smaller than the display pipes. Though that is now a pretty old chip, and always had a bit of focus on "multimedia".
The overlay capabilities of the modern Snapdragons are also quite absurd. They support like upwards of a dozen overlays now and even have FP16 extended sRGB support. Some HWCs (like the one in the steam deck) even have per plane 3D LUTs for HDR tone mapping (ex https://github.com/ValveSoftware/gamescope/blob/master/src/d... )
The composition is bandwidth heavy of course, but for static scenes there's a cache after the HWC in the form of panel self refresh.
Personally, I don't see it as a "2D drawing API", it doesn't accelerate anything special about 2D, only blits and transforms, which a 3D API will eat for breakfast.
Edit: But actually, I couldn't find references to anything similar besides VBE/AF which even when current got almost no support directly in hardware, so folks had to resort to hardware-specific DOS TSR's. I'm not sure if there's anything newer than that.