Re: Yes, but what can we do with it?
Oh, and one other thing - you say that computers are getting dumbed down more and more, and they're more and more appliances. Well, hang on - take a look at PCs in the early-mid 1980s - from the perspective of a normal consumer. This is not including people who do hardware hacks, or know machine language, or are developers; as far as I can tell you're talking about general users.
Sinclair: BASIC in ROM. No operating system. No expansion. No use whatsoever.
TRS 80: BASIC. DOS like thing? I can't remember. A little bit of expansion. WTF gfx.
C64: BASIC in ROM. Magicians can do anything with it; normal people could run games.
Atari 800: BASIC in ROM. No operating system as such; not much expansion.
Apple II: BASIC in ROM. Simple operating system. Expansion via addon cards to an extent.
IBM PC: BASIC on disk. DOS. Same as we've got now. Expensive as hell.
Mac: Sophisticated OS. Hypercard (!?!!). Expensive as hell. No expansion at all. Ever. Like, really.
AMIGA: Expensive as hell. Awesome OS. Multiple programming options. Huge expandability. Fantastic graphics and amazing games. Result: Went out of business almost immediately.
All of those operating systems (Save the AMIGA's) were quite simple and couldn't do a whole lot. Hardware expansion was extremely limited at best. The vast majority of computers limited you to ROM BASIC out of the box, and moving beyond that (aside from premade programs) was very difficult.
You could do any of the things you'd like to do on any of those computers - not without going to extraordinary measures, like using assembly / machine language. On the PC you can use already available dev environments, among other options, without bypassing (or recreating) the operating system.
Honestly, things are a lot better now than they were then. I'm guessing it feels like we could do more then because we didn't know what could be done yet - so it felt like there were infinite possibilities. The more you know, the less expansive your view is. But that ain't the OS maker's or the hardware's fault.