Summarizing what I learned when I looked into this:
VLIW directly exposes hardware parallelism to the programmer, making more throughput available without requiring complex scheduling machinery (save die area + power). This works well for code targeting a single architecture (like embedded) where timing is predictable (like DSP code). Essentially VLIW machine code embeds a bunch of very specific assumptions about processor's internal design.
Here VLIW is alive and well for targets like a cell modem baseband or set top box video decoder chip that needs maximum efficiency and only runs the firmware from the manufacturer.
General purpose CPUs don't fit this model. They need to support running the same code across chip variants and generations, each with varying amounts of internal parallelism, cache, etc, and instruction timing is not predictable or deterministic (memory and IO latency, cache residency, etc etc). Modern high performance CPUs have extraordinarily complex and clever machinery to process what user space programmers think of as "machine code" to find and use as much parallelism as possible. This includes speculative execution based on behavior observed at run time, something not possible even in a perfect VLIW compiler. Given this you're not likely to see VLIW instruction sets exposed to user space. This is consistent with Linus's view I think.
Notably, as 3D accelerators became user-programmable VLIW stopped working well (see ATI/AMD GCN architecture rationale).
What Transmeta did is try to combine the advantages of VLIW hardware and stability of existing serial x86 code by filling the gap with a JIT living below the kernel ("Code Morphing Software"). There are examples like HP Dynamo that suggest this is a workable idea and in practice the 1st gen Crusoe product was decent. There are some different ideas why they failed but at least part of the problem is that they got squeezed by Intel's manufacturing advantage: 20 years ago being a year or two ahead in fab process was more effective than having a better design. I haven't seen any strong case that the technical approach wouldn't work at least as well today with TSMC and Samsung now leading in fab.
Interestingly the Denver architecture NVIDIA uses in their embedded products follows the Transmeta approach with an ARM front end and embedded JIT. Reportedly they were originally going to do x86 as well. I'm curious what's going to happen there now that they own Arm.