It's true that there are many tens of thousands of characters, but relatively few are actually used. To me it's very similar to there being a million someodd words in English. And nobody writes that biang character. It's notorious for being huge and weird. I could easily find some comparable ridiculous English word that we don't actually use.
I spend a few hours a day practicing writing characters, and yes, it is difficult and time-consuming. But the information density of a language has to go somewhere. In English, I guess this is facilitated by a relatively granular sound system and complex grammar. Mandarin ended up with a relatively simple and inflexible sound system and simple grammar, so the complexity went into the characters.
No, they can't just write pinyin instead of characters. Well, they could, but it would be profoundly annoying. It'd be like looking at a TV much too close, or looking at assembler instead of Ruby.
Yes, it was a terrible mistake to "simplify" the characters. It did not simplify the process of learning the characters in any meaningful sense, and split the user base. But I find it very hard to understand why anyone would say it is necessary to know both simplified and traditional characters. In my experience, it's just not true.
At the end of the day, we more or less choose to keep these anchors around our necks because they're fun and interesting playgrounds. I don't really need Mandarin for anything, but I still learn it, just because it's interesting, and because when I tell people that I really care about them and want to get along with them peacefully _in their own language_, I think it goes straight to their hearts and means a lot more to them. And it means a lot more to me, too. If that's stalling "development", I'm OK with that.