>you don't have large firms that can exploit economies of scale.

There are also diseconomies of scale in residential construction, partly for reasons described in the original post. Having many layers of management is inefficient when you're dealing with work that involves a lot of customization and homeowner input.

>Despite being around for decades, most contractors still use copper.

No, they don't. Pex is ubiquitous in single-family and smaller multifamily construction now. Copper is used in larger and nonresidential projects where the plumbing codes require it. The idea that professional plumbers and homebuilders haven't heard the news yet that Pex is cheaper is silly.