I agree with GRJ, you have to understand that in the market we are in things like customer service or things like being able to keep things running that are older don't enter their minds. Why? Very simply, there is no competition in this market, it is a small niche market where basically the model is take it or leave it (with some exceptions, one I can think of is someone like Ross Custom Switches).
The reason they didn't make them modular is pretty simple, that would have cost more to design. The boards used in legacy and TMCC were pretty much custom, in the sense that the actual control circuitry were things like ASICS (I assume), which are custom made for the application (application specific integrated circuit). Anything an ASIC can do could be done in something like a microprocessor running code (like a small computer). Design a board with off the shelf components and with 'universal' processors loading the application in code, and it would be modular..but that initial design to figure out how to do it is a lot more expensive, I guarantee, than "hard coding it" they way they did.
I'll give you an analogy, there is a tool some of the older engineers/cs people will remember, a thing called a Karnaugh map. Digital circuits are really nothing more than boolean algebra coded into circuits, it is a string of operations that translate into "And" , "Or", "Nand", "XOR" functions. When you derived a circuit using boolean algebra, it could be long and clunky (to be honest, not even sure they bother using boolean algebra to figure out the logic). When they were still using (god help us) vacuum tubes or even transisters or early gates on a chip, a Karnaugh map allows you to simplify your boolean algebraic expression, which in turn means using less gates. When the lag time on gates was measured in milliseconds or more, every gate removed made it faster, so it was an invaluable tool. The time consumed doing a Karnaugh map reduction was not insignificant, but it was worth it with performance.
However, by the time i learned about Karnaugh maps, they were obsolete, even more so today. You get a circuit that works, you don't worry about propagation delay or cost of gates, not with picosecond response times and who knows how many gates on a chip, you get what works on paper, you build it. (and yes, there are limits, and things like the size of the motherboard matter, but still, given chip density, that isn't an issue likely). The reason they don't bother is the engineering time to do the 'chip bumming', pure and simple.
Likewise, to build modular boards, rather than building a board as quickly as possible using custom stuff , would be a lot more engineering time to get it to work, and they aren't going to do it.
Personally, if Lionel is going to do that, then maybe for the older boards make them public domain with the disclaimer that third parties building them are not in any way, shape or form supported by Lionel. Once you have the specs opened up, it is likely third party firms could do it. There is a caveat to that though, there would need to be enough market for replacement older legacy and TMCC boards to make it worthwhile for them to look at modular engineering (the good news? once they figure out the basic elements, it is likely they could handle a wide range of board replacement I would guess; again,not an expert on these specific things). The other thing Lionel could do is what they did with TMCC with ERR and so forth, and license it to a third party firm, let them have the hassle of handling replacement boards for older (and maybe newer engines out of warrantee).
The real question that I haven't seen an answer to is just how many engines die, and at what point? GRJ and the guys that do repair have some knowledge, but are these like appliances, that the odds of a board frying and not being able to get a part is high, or are they like TV sets that keep running and we throw them out because we want the latest and greatest ? Put it this way, I tend to keep my TV's, none of them are that new, most are pushing like 10 years at this point, and none of them has died. On the other hand, appliances like refrigerators, washers , microwaves and the like seem to die quite often and you find you can't get the parts. If there is enough demand then a third party model could work.