Hasn't it?
Smalltalk was a great object-oriented system back in the day. Why hasn't object-oriented programming taken over? Well, it has. It just doesn't look like Smalltalk. Mainstream languages keep getting more Smalltalk-like with C++, Java, C#, etc. Fashion and style change slower than anything, so when OO went mainstream, we got it by gluing parts of OO to old languages so it looked enough like C to swallow.
Functional is the same way. Haskell was a great functional language. But we've got even more mass of mainstream programmers using C-like syntax today than 20 years ago. So it has to look like C. Done: look at any LINQ expression and tell me it isn't functional.
