I don't understand, isn't the BEAM just a software runtime that provides a lightweight thread implementation that OTP can use? Why couldn't they implement an alternative that runs on WASI?

I agree that Elixir without OTP becomes much less useful, but there could be some changes to the language to enable in-process state changes so that you wouldn't be limited to a single process and the immutability restrictions that would make that very difficult to do anything useful with. I'm sure they thought of this problem and have a solution in some form.