Some things that haven't been mentioned yet.
Return to Blockland is pretty much an essential addon for Blockland. There are absolutely NO Steam games that require you to look inside the game's data folder in order to get (practically) as good of an experience as everyone else to play the game. If Blockland got uploaded to Steam, I'd assume the player count would increase a lot. All the new players would think RTB is some complicated stuff that old players just boast about that people don't bother looking into. Steam players are very picky; Everything that comes with the game must be contained within its own interface.
It would take a lot of work for Baddy and/or Kompressor to "implement" the one feeding source of the community into the game. There's a lot of complications, too, since all of the features in the RTB Overlay would have to be included somewhere else. People don't want to have two different overlays, one for Steam and one for the game itself.
Another problem: Blockland is very quirky. It has many issues and silly things attributed to it that most people pawn off since they've been here for so long that people become oblivious to them. The entire minigame feature would have to be removed, and replaced by SERVER SETTINGS for what players could do and how the gamemode works. Currently, minigames are all just default and you never, ever see more than one non-default minigame crop up at a freebuild server for example. Most of the time that happens, it's just a newbie messing around or people are bored.
There's other things you could attribute, but I wanted to get the minigames thing off my chest. The server creation GUI looks unlike every other GUI at the moment. The colorset editor is only found in the player avatar screen, and doesn't serve to change the colorset used for bricks. Lastly, the physics engine isn't perfect, the best example of this being in ramps(there's so many things wrong, just look at it yourself).
Having a small community eliminates these problems as being a 'big deal,' because anyone willing to play the game gets used to these issues as they learn the ropes of playing Blockland.
TL;DR The game currently has too many issues to be presented to a very large community.
