The issue is that if you want DPI virtualization, and all of the desktops do want that, you need to be able to translate all of the coordinate spaces everywhere. If you try to integrate this into X11, you run into a myriad of different problems that are just not that easy to solve. It was direct inspiration for some of the design elements in Wayland.

The same folks who are working on Wayland today did a lot of work to get X.org to where it is now. They could do more, but the writing was on the wall.