Given that Github seems to persistently have these scaling challenges, IMO either one of these two things must be true: 1) either they are less competent at running large scale infra vs other large tech companies 2) or git itself adds unique challenges, that make this more difficult to scale

I think 2) is much more likely than 1).

So why stick with git? Is it feasible to make a new VCS that scales better if you start from scratch?

Obviously getting adoption of something else would be a challenge. But Github has enough market-share that they could plausibly pull this off. Particularly using costs or reliability to incentivize migration.

(Not saying that this would necessarily be good for the community in general but I think good for Github.)