Telnet is used in legacy, IoT, embedded, and low-level industrial hardware. It's also intentionally enabled on devices where automation was written for telnet and it wasn't easy to switch to ssh.
If you investigate most commercial uses of ssh, the security is disabled or ignored. Nobody verifies host keys, and with automation where hosts cycle, you basically have to disable verification as there's no easy way around the host keys constantly changing. Without host key verification, there's kinda no point to the rest.
Even assuming the host keys were verified, the popular ssh conventions are to use either long-lived static keys (and almost nobody puts a password on theirs), or a password. Very few people use SSH with 2FA, and almost no-one uses ephemeral keys (OIDC) or certificates (which many people screw up).
So in terms of how people actually use it, SSH is one of the least secure transport methods. You'd be much more secure by using telnet over an HTTPS websocket with OAuth for login.
> Very few people use SSH with 2FA.
PCI DSS, HIPAA, and ISO 27001 each either highly recommend or enforce this.
I wouldn't use a jumphost without it.
> Nobody verifies host keys,
The known_hosts file is verification of host keys. It's not verification of a host cert, which is a different thing. Most sshd instances are running on ad hoc hardware without the ability to associate them with someone a cert authority would be willing to authenticate.
Basically people running services that need cert-based authentication are already using TLS (or if they're using sshd they've locked it down appropriately). SSH is for your workstation and your RPi and whatnot.
How do you automate, for example, "HTTPS over websocket with OAuth", without providing some kind of hard-coded, static or otherwise persistent authentication credentials to the calling system in some form (either certificate based auth, OAuth credentials, etc.)?
The problem with IoT and embedded secrets isn't really a solved problem, from what I can tell. I'm not sure that OAuth exactly solves the problem here. Though all your comments about SSH (especially host verification) holds true.
Just honestly trying to understand the possible solution space to the IoT problem and automated (non-human) authorization.