So we're not fixing the transport layer due to limitations in the network layer that have been fixed, we're just not using them.

You mean IPv6? That suffers from exactly the same problem: ISP's just don't give a damn and don't roll it out.

You cannot expect your average internet user to know about these things, so they get away with it.

Major residential ISPs aren't rolling out IPv6 largely because they already have enough IPv4 space for their customers.

Take a major UK ISP like Virgin Media. According to Hurricane Electrics BGP looking glass project they are originating 9.4M IPv4 addresses[0], however, at the end of 2012, according to Wikipedia[1], they only had 4.8M customers.

[0] http://bgp.he.net/AS5089#_asinfo [1] https://en.wikipedia.org/wiki/Virgin_Media

Virgin Media can't even expand that easily because they must lay cable in areas that weren't covered by NTL/Telewest infrastructure: and I believe is extremely expensive and time consuming with planning permission being what it is.

Pretty much. I find myself suspecting that we will see more and more sofware "fixes" piled on top to avoid doing mass hardware replacements...

Yet it can be done. Digital over the air TV for example.

One thing when it is done at the consumers expense, another when the company has to cover it.