Gaming

Most of time, it's the juggle of time and resource available to you, but there is still a hard limit otherwise how about demand BG3 to also run on my antique knockoff NES? Cause they are too lazy to accommodate the hardware limitation? How about my smart watch? Or someone else's smart fridge?

Don't get me wrong, what you said in some cases but most likely the devs are told to push it out instead of make the game run better(on the target platforms.) There are no secret sauce to otherwise fit a game like BG3 to previous gen consoles.

Last, if you are really good at this optimization thing the whole industry will pay good money for your skill set.

From what they've said the game can run fine, but the issue is getting local split screen on the S working because it has such a small amount of RAM available

It's just a business decision. Enough players have strong enough hardware that the invest into optimizing for weaker hardware isn't likely to pay off.

If there is a weaker platform with lots of players, like the Switch, that can make optimizing financially viable, but obviously, it depends on how much optimizing you would have to do...