What factors may have been blocking efforts to scale the current Ethereum?

This is a discussion stemming from @lrettig’s Hypothetical maximum scale of Eth 1.x.

I would like to create a strategic postmortem of sorts to discuss what was potentially blocking investment in upgrades to the current Ethereum. I chatted about this briefly with @lrettig last week and we’re curious to get more views on it.

In my own reading of the 1.x proposals and recent Ethereum dev/release history, I get the impression that certain clear pathways to scale Ethereum were held back by awareness that any major improvement on mainnet would lead to an unsustainable run-up in state size.

For “strategic postmortem” reasons, what I’d like to know is: was state size the primary blocking issue on moving forward? Was it a wish to improve development processes in 2018, rather than work on forking changes? Or was it “Ethereum 2.0 has this”?

I think that @cdetrio, @karalabe, and @5chdn might be able to shed the most light on this, but we’d all be interested in any relevant perspective!