What do you mean by code hungry and convoluted? Why would it matter whether the ISP application is 2K bytes or 2T bytes in size? It runs on the host machine. The object file being programmed is just that, namely, an object.
I referred to the actual uC.

I can see architctures/masks that would make including JTAG programmability a breeze and see some where the added cost would exceed $0.10.

$0.10 may not sound like much, but to the customers that make the semiconductor manufacturers stay alive by buying chips in the millions $0.10 is VERY significant.

My most used (non-uC) chip just got substituted because of a 'nominal' price increase.

Erik

PS Richard, I understand that you speak from your perspective and doubt that even $1.00 more for a uC would affect you, but the above is reality.