It isn't Android that's slowing down your old phone, it's apps. Time-to-market trumps everything else, especially efficiency. So until an app category matures and incumbents face competition, efficiency is a nice-to-have. To be fair to your comment, often enough it's Google's own apps that bloat. But you can run a cut-down suite of apps in 512M.

As for LTS editions, you can't have those because the bsps for the chips in those cheap phones eol sooner than the "long term."