Games already cost an insane amount to develop. I would imagine that they would either have to have less content or less realism or cost more.
Plus, there's a limited pool of devs who can do 3D game engines(I sure can't!), the more wheel reinvention, the less available resources to do new things.
And then wheel reinvention also leads to incompatibility. For some reason it's fashionable for formats and protocols to include optional features instead of making everything mandatory. The big ones support all common ones, the DIY ones usually just support the options they need, and exporting from one and importing to another might do something weird, it takes a lot of work to support the de facto undocumented standard that emerges from sets of optional features with a few popular implementations.
Large libraries are debuggable too, because the reuse lets devs throw insane amounts of resources at debugging them even if it's really hard. And for the same reason, they can often be pretty well optimized. Modern software seems to be pretty fast now that Moore's law slowed a bit..
In theory, it's really cool that smaller solutions are fixable, but I'm just not sure we could actually have all this software everywhere running the whole world with small and simple in house code.... I mean, that's kind of what we had in the early 2000s, and while most things in general seemed better and people were happier.... everything that ran on a PC from the Win95 to the Win11 era seemed pretty insecure and unreliable.