Who said anything about blockchain?

It is one thing to formalize contracts as functions. Also formalizing the world state is a much harder problem and Ethereum tries to solve it by declaring the blockchain "the world". This is the harder problem as you can observe in courts where nearly all the discussion is about the world state.

For an example, the question might be "murder" vs "manslaughter". Was there malice? This is about the world state. Once that is decided, the function to determine the sentence is relatively quick to compute.

> What's stopping this now?

Well, to start with, a judge who decides that part of your contract is invalid for one reason or another isn't going to care about your claims that it's impossible to alter because blockchain.

Because literally the only step that's been taken in that direction is that Ethereum exists?

If you can come up with a function that can determine whether or not someone's behaviour is "reasonable" or not, you might be on to something.

Oh yeah, that someone might be a person, a corporation, or a government, and the standard of reasonableness will depend on what exactly it is they're doing.