To my understanding, they've tried implementing it before. However, I guess developing it to work with the different question types and things like that within quizzes apparently messed up how the quizzes would operate. I don't think they're trying to "limit" anything on purpose. It's likely that it's not defaulted everywhere on Canvas because Instructure hasn't been able to find a way to successfully make it work everywhere on Canvas like it's supposed to. That doesn't mean they aren't wanting or planning on continuing to try implementing it.
All this being said, it's definitely possible that there are other tools similar to immersive reader that are out there, however, with the ones that I have come across, in order to successfully implement it into Canvas, the school would have to purchase a subscription and then add the app into the LTI tools. I'm not exactly sure if there are any other types, such as extensions, that Canvas would fully support.
Noah