The Smalltalk approach doesn't really integrate well with anything else.
If you treat data and code the same, it's hard to separate code from data. If you're writing a program for a single machine on which it should be used, that's fine, but if you want to write your code once and run it across many machines, that's a problem.
ERP systems are a bit like this; system owners (businesses) are often able to change any part of the system they want. Predictably, this makes version upgrades an incredible pain and often locks companies into an unsupported proprietary fork of a 20-year-old version of their CRM.
> how did we go back to dead text files again?
We never went away from it. It's how a significant amount of computer use has always been. Smalltalk, Oberon, Lisp Machines (mentioned by sibling), they were always minority systems.
There was a brief time when maybe home computers could have leaned this way, but that lasted until VisiCalc. What sold computers was software that turned them from clay to be molded by the user into a defined tool. People prefer appliances (or were convinced to prefer appliances), and appliances make more money for businesses than distributing programs as a Smalltalk package would have.
> I genuinely do wonder why that has been the trajectory.
The simple answer here is still likely the best one: Smalltalk and Lisp Machine systems were expensive and proprietary right at the same time that Unix and C became free (and therefore ran everywhere)
Yes, and porting them on top of UNIX wasn't the same thing, while still being commercial.
Even with commercial UNIXes, it was extra on top of standard UNIX developer SKU.
Same with Ada, by the way.