Real applications don't hit CPU walls, they're bottlenecked by I/O more often, and the biggest CPU wall is memory accesses. There is a lot of room for innovation there if you shirk off POSIX compatibility.

Also, state is not a problem for functional semantics. Remember "functional" is a semantic distinction, it doesn't imply a ton about optimized implementations of those semantics. For a stateful system the only thing different about a functional approach is the programmer cannot express a program where yielding next state invalidates current state. Most of the time a sound, functional program can be compiled into in place (mutable) operations on the state, the difference is they're free of logical errors.