You can see the demand in the sheer number of WYSWYG editors for the web.
But for development, basically all the big players stopped trying or died for other reasons. I just think no-one's got the will to try it.
I think it could be a huge opportunity for someone. Right now, with AI coming to the fore in development, seems to be when it would become absolutely killer for less code orientated people making their own apps by adding/dragging controls around and telling an AI what each control should do. All without a programmer involved. The AI could even "solve" the hard problem of a good responsive WYSWYG editor by making assumptions of how the user probably wants the controls anchored.
So I think that's the market we'll see a WYSWIG editor emerge again for.
I would add that a large part of the push away from it came from not having dedicated design and development teams. Is, I think, why industries such as gaming have stuck to a lot of these workflows. You have art designers creating the assets and hand them off to an integration team that will get them into the game. Tooling is specifically made to integrate the art and the program.
In the web, we seem to have tried to converge all of that tooling into the symbolic text. Works great when it can work. But it greatly limits what you can graphically do. And is largely why we don't design things graphically anymore.
These all go direct to code instead of XML or some other extra layer of code.
What I would probably focus on is better integration with Figma and similar tools. Use that to do the WYSIWYG part and then generate corresponding code (possibly with LLMs).
The biggest limitation you tend to have in WYSWIG is that at some point you really need to have the true data the user sees to ensure everything looks good. That becomes a bigger hassle than coding the UI manually. (Particularly when doing multi-platform things.)
Like, why aren't more big projects use accessibility as hot reloading if those are so great?
Or, a simple illustration to your reliability point - part of the reason the files are hard to read is because XML is an atrocious format. And also tools like VS aren't even smart to preserve user formatting, so you can't even manually make it easier to read. Why hasn't it been changed in so many years?