Simons' BASIC was still interpreted. If you wanted graphics and performance, you used Assembler.
Many/most people were using a disk speed-up cartridge like Epyx's Fast Load. You could only use one cartridge at a time. If they placed Simons' BASIC in the C64 ROM, that could have made it less compatible with existing software.
They didn't want to pay the licensing cost for an application that only a minority of C64 owners would have wanted.
A more interesting possibility is the post-Tramiel Commodore including a ROM version of GEOS from 1986 onward, and selling it on cartridge form to existing customers.
Other possibilities:
* Launch Amiga 2000 and 500 in 1985 instead of 1000.
* Eschew Amiga completely, in favor of the Commodore 900 with Coherent. Instead of Amiga silicon, ship with a "VIC-III" for graphics and two SIDs for stereo 6-channel sound.
Second, I think the power of the 64 was its' limited BASIC but it was a good start (still the best line editor of most systems, just cursor up change the line, press return and done), The no-frills in the language but not in the capabilities made it a platform where there was no one definate way to do graphics or sound so there was a lot of experimentation most good, and some downright awesome. I think not having those features baked in the ROMs made the community a lot more dynamic.
I am torn about this. Forcing people to use machine language for anything serious makes sense. The 10,000-strong C64 software library exists. Your point about the great screen editor is well taken.
On the other hand, what about all those who would have experimented on their own more if they could have done things with CBM BASIC 2.0 that Atari BASIC has out of the box? Applesoft BASIC has more graphics support than CBM BASIC, too, and there was never a problem with converting experimenters into "real" developers.
Really? Selling what? The TI99 was never a serious competitor for anything.