Speaking for myself, the DSP theory and HW was not fully developed in the late 1970's/early 1980's, so the power to implement the interpolation filters wasn't really there. Also, speaking from a foggy memory of my 1980's-vintage digital theory grad classes, many of the early digital implementations mimic'd analog filter designs and did not take advantage of advances in digital filter theory (some made sense then). There have been major advances in delta-sigma theory and technology since then as well. I was very lucky to have Henry Samueli as my advisor back then, though I was (and am) an analog guy, and took a couple of classes with Gabor Temes (really nice guy!) I have worked on a few delta-sigma designs and they are very challenging beasts, albeit mine targeted RF ADCs and DACs.
As for the analog filters, true that the theory was (and is) there, although for commercial applications some of the things like state-space and Kalman filtering was rarely used IIRC. Audio filters tended to be Butterworth and other filters like Bessel, Chebyshev, and elliptical designs tended to be found more in the RF world so part of the issue may have simply been unfamiliarity on the part of the designers. I do not know that, however, as at that time I was working in a design world relatively far from audio. I tend to think a variety of issues were very challenging, including dealing with the (relatively) low sampling rate so image filters had to be very high-order, op-amps that sometimes struggled to provide the gain-bandwidth required and ability to recover quickly and cleanly from overload (since glitches from conventional DACs are very large, very fast, and just generally obnoxious), and limitations of the filter designs themselves (high-order analog filters are touchy IME). Finally, there were commercial realities, as the players were expensive and there was naturally pressure to reduce component counts and reduce cost.
Didn't Philips end up having to depend upon Sony for much of their early players? Been a while, maybe I am mis-remembering.
All IMO - Don