Modular is mature technology and would have taken over the whole industry decades ago if it was actually a lot better.
There are a lot of people who don't want their friends to know their McMansion was delivered on a bunch of trailers.
That is a common stated goal by HOA officers used when I inquired about building alternative structures in a HOA when looking for land. Also preserving uniformity is a common reason.
I agree that there are underlying motivations, but I'm not sure what they are. It could be driven by some sort of underlying social contract that was established with the HOA or some fear of the neighborhood getting out of hand or diminishing in prestige if someone puts up a Yurt, Geodesic Dome, or a Tiny Home. A common constraint is forbidding habitation within a RV & minimum livable square footage & footprint. Contractors benefit from these rules as a minimum square footage is more expensive to build. It would be interesting to see some research into the underlying rationale of these administrators.
I think manufactured homes would be more palatable if they stick-built certain parts of them. The big one being the roof. Instead of the low overhang, low slope design that works well for transport, ship them as roofless boxes and then do the roof on-site.
Of course, the problem with that is that a manufactured home isn't -that- much cheaper when you're done, so any kind of manual labor to make it prettier will close that gap quickly.
I think it would have taken over if it was cheaper. But for larger size buildings it isn't and that's what I think stops larger scale adoption. But they are faster to deploy.