My (minimally educated) guess is the funding model: they need to give lots of congresspeople stuff for their districts. Big projects provide much more stuff and are easier to sell if everyone can get a piece at once rather than Alabama getting this one piece one year and Colorado getting this other piece the next year.

Seems a reasonable guess, but I'd hope that if that were the main stumbling block then it wouldn't be too hard to still sell it as a multi-state project that's also multi-stage, either sharing the work at each stage or signing off up front which stage goes where.

Remember that for congresscritters, it's infinitely easier to cull $20m from NASA's budget than $5 from the DOD.

Also remember that a non-trivial amount of Americans believe the moon landing was faked, or that the earth is flat and NASA is part of some conspiracy. Or that a certain political party has spent literally three decades saying "the nerds at NASA are lying, there is no global warming" and you might start to understand the complete lack of political will to give NASA the funding to do even literally the basics.

We have more ideas for telescopes than money to build them. So to get funded, a new telescope needs to be a substantial improvement over what already exists: 10x or more, typically.

There’s typically only a chance to build a flagship every ten years or so.