They're currently prioritizing moving to proof-of-stake (which will end the need for ethereum mining and its high electricity usage globally) and sharding (which will solve the congestion that's causing very high transaction fees). Using WASM would be nice in some ways but it doesn't solve any high priority problems. Maybe it will happen later once some attention is freed up by these main problems being solved.
Most blockchains require all nodes to process all transactions, limiting the total transaction limit of the system to the rate of the slowest node that's intended to be supported. Ethereum is working on sharding transaction data so that every node only needs to handle all of the transactions of its chosen shard, which will allow the enforced transaction limits to be multiplied by the shard count. There's complexity to this because any single transaction can involve data from multiple shards.
Allowing the global transaction limit to be raised will decrease the competition for blockchain space and massively decrease transaction fees.
There are also other standards being worked on to allow transactions to be made in a way that they don't have to be broadcast to all nodes, which will also allow their transactions to have much cheaper fees. These systems are being developed simultaneously by unaffiliated developers in userspace ("layer 2") rather than by the core Ethereum developers who are working on proof-of-stake and sharding. These systems generally come with their own sets of trade-offs (including what kinds of smart contracts they support and how smoothly they interoperate with outside systems) so they don't completely replace the need for sharding being done by the core developers. ZK rollups and optimistic rollups are some of the main kinds of layer 2 scaling solutions being worked on now.
