A shell is supposed to be an interactive user interface and a very thin glue layer for some simple tasks. Once you move beyond a certain level of complexity, a shell is just the wrong tool for the job.
Powershell is too complex to be a good shell, and there are too many bizarre idiosyncrasies about it to hold its own as a programming language. It just doesn't really have a place.
Yes, the shell can be seen as a subset of OS REPL that's been optimized for efficiently performing simple system tasks and gluing things together. The problem is, ever since Lisp Machines died off and UNIX won, we've lost the REPL. We're missing a tool for doing complex tasks interactively, so people naturally started to repurpose shell for that.
Powershell is too complex to be a good shell, and there are too many bizarre idiosyncrasies about it to hold its own as a programming language. It just doesn't really have a place.