I’d say that it goes back fairly far to the early 2000s or so when they should have had a development cadence like “widebody, narrowbody, widebody, narrowbody” because narrowbody is 80% of the market but instead it has been “widebody, widebody, widebody, widebody, yet another widebody”. Airbus and Boeing colluded to compete with one hand behind their backs in this time period which was profitable in the short term but would kill Boeing in the long term if it were not “too essential to national defense to fail” —- that is, with fly-by-wire and better geometry the A320 has more of a future (can even steal some of the widebody business) not the mention Airbus bought the A220 which is a next-generation narrowbody which was developed not by a big manufacturer but a small manufacturer backed by the Canadian government.
Try getting a flight in a modern narrowbody like the E2-Jet or A220 on an airline like Breeze and you will se that nobody would put up with riding in a 737 if they had a choice; even though that kind of plane is small on the outside it feels big on the outside, comfort is much more like a huge plane. It’s one of those things you have to fly to believe.