The key point here, that modern software/OS are just too bloated/unsecure, etc, right? Then some can write OS/software not so bloated/more secure for a hardware platform which is dirt cheap and still more powerful than Mega65 is. Just think about the 9 dollar C.H.I.P. SBC, which in fact I have. Yes, it has 32 bit ARM as its CPU. But if you are frustrated with 32 bit, you can use only 8 bit from each registers ;-P or you can even write a primitive emulator to emulate a 8 bit CPU, and build an OS on top of it. Since that OS is run over the very think and quick CPU-only emulation there is no way to "escape" from that, and that system really can say it runs on that CPU which is actually is a "virtual CPU" ie emulated.
What I mean here: mega65 will never be 9 dollar ... or even close, I guess. So why people would buy it? The answer is simple, because its origin ie the nostalgic feelings for 8 bit systems. If only the "better and more secure software" is the term, you can create that on a more modern and much more cheap hardware (and yes, here not "the more modern" is the key - is just a side effect - but the more cheap, more easy to get, etc etc).
Also, I am not sure what you mean about being secure ... If you want a modern multi-task OS, a 8 bit like system is already ruined out, it cannot be secure, by design, unless you have the extra effort to put the hardware level stuff what most modern CPUs have. Ie Mega65 won't stop you to access any memory, or execute code where you want, and so on, compared to a modern CPU hardware where even the hardware can do this for you (oh yes, Spectre, meltdown and other problems can occur, but still when a friend asked me, does spectre/meltdown can in theory effect Z80/6502/etc, I told: no, because there you can whatever you want, no need for a bug to do that - so it's not a major point against modern stuffs compared to 8 bit one). Mega65's security efforts are great btw, but it's more like to separate a freezer-like solution "environments" and not so much for creating a multitasking OS to today's standard to work with, and even if M65 would allow, it's about the same complexity and hardware design again as modern CPUs, just data path/bus length is chopped to 8 bit from 32 bit, but the bulk of the stuff is there.
About modern-feel OSes: I am aware of a quite great OS for Z80 based computers called SymbOS. It's really great, it's a micro-kernel architecture multi tasking OS with many applications, and platform independent apps, meaning, the same app can run on any computer (even very different one) if SymbOS runs on both (which involves of course at least Z80 as the CPU as the common factor). Currently it even supports various network hardware for those 8 bit micros, being able to play over the Internet from two different 8 bit systems. It can even run as less as 128K of RAM in most cases, and still multi-tasking, windows, even tools like ftp, and "modern" things. So it's not impossible to do, but SymbOS (in fact I know its author, even met him IRL) is considered one of the biggest "retro computing" development nowadays which huge source code base, and that here fuel is the various communities of multiple Z80 based systems to have the critical mass/interest. But, SymbOS is a great example, but hardly secure, you can always just crash the whole OS, if you write a single byte somewhere you are "not allowed" (but nothing can stop you to do still) to do. From a strict security point, it's the least secure environment you can imagine, with network connectivity, multiple processes which can harm each other or the OS, etc etc. Any modern OS (even the worst one) are more secure. But surely, people don't use SymbOS because "it is secure" but because they love retro computing / 8 bit, and want to see a modern OS as well on their beloved computers, even if it's - logically - does not make sense (don't get me wrong, I like SymbOS too). But hardly anybody would say that SymbOS is superior to Windows or whatever because it's more secure. Not even faster .. Well, not so bloated, that's true :D But given the price point you can get a PC to run a modern "bloated" OS to the situation where you want a 8 bit OS and hardware for that ... hmmm ... then I am not sure, it's cheaper to bet on the 8 bit. And well, what I haven written already above, some can code for ARM/probably using the thumb opcode set to achieve similar code density as 65XX, so it's possible to code a non-bloated OS for an ARM based stuff, as for Mega65, just more cheap, more easy to get, and so on. And by the way, ARM, actually Acorn who invented ARM as the the new CPU instead of 65XX wrote their own OS, RISCOS, which - I guess - it's more close to the non-bloated state still and has got true, "retro computing" origins in some way. And you can run RISCOS today on a raspberry Pi or so, which is also kind of cheap.
Ok, to be clear, I don't speak against Mega65, I *love* this project, but it's not something which compete directly a desktop PC for an average user, and never be, period. Not just the technical side, but also the price, btw. I can hardly imagine that Mega65 can turn into a project that some can make an ASIC verision, ie not FPGA. It costs a lot, but worth if you want to sell it, ie millions of units or such. Then it's really cheap, indeed, probably only an epoxy blob on the PCB in the cheapest form :) But then it's a "fixed logic" already, nothing like an FPGA.
What I love mega65 for, is my desire about spend my hobby hours on 8 bit systems, retro computing, "new-old" designs like Mega65 and such. it's not that I want to replace my daily used PC, I hardly can imagine that Mega65 can play HD videos on youtube, playing massive 3D games or just browsing that (web standards are quite bloated already not to be able to implement a browser in a "small form factor" ... and you can't replace the Internet if you don't like this fact, unfortunately, also you can't skip internet that you deny it then). Yeah, nowadays, people need things like that, that's why you can't just deny the needs that a 8-bit class system is enough for an average user.
I am not sure what you mean about "GNU" in "GNU Generation". I am not aware that Mega65 is an official GNU (gnu.org) project :)