Re: Graphical
You could make another server OS, but are more people going to use it as a desktop OS or a server OS? I contend that nobody will use an unsupported and mostly untested OS for a production server, but some would use it on a desktop if just to experiment with the chance that they like it and continue from there. People are more likely to experiment with an OS with both interfaces rather than one that only has a terminal option.
Embedded might work a bit better, but embedded OSes usually have pretty daunting hardware compatibility problems before they're useful, which is why a lot of embedded devices big enough to use a full kernel use projects like Yocto to build them from a lot of components which work with Linux because the manufacturers already thought of it. Meanwhile making it small enough to run for more restricted embedded systems would mean creating a completely different kind of program.