The discussion has various conflations, omissions, and errors. It's been a long time since Dylan on the Newton was what I worked on every day, and my memory is no doubt faulty, but I'll do my best to correct a few things.
"Apple itself had a very nice system for UI development on Dylan that was arguable better in many way then the Next system. But when Steve Jobs came and they had Next, that wasn't developed anymore."
This one is misleading in a couple of respects. First, there was more than one Dylan development system at Apple: Leibniz for the Newton and Apple Dylan for the Mac (I think it was called "Hula" internally, but I may be wrong about which project got that name). Both were written in Common Lisp using MCL, but they were distinct projects with different goals. Neither had tools like NeXT Interface builder. The Lisp-based application builder that rivaled (and in my view surpassed) Interface Builder was SK8, which was unrelated to Dylan. SK8 was also written with MCL.
Dylan was not canceled because Steve Jobs returned with Nextstep. The cancellation happened several years before Steve came back and was part of Apple's normal product and project churn.
"Apple Dylan seems incredibly limiting and opinionated for no reason."
It didn't seem that way to me, but that's about all I can say to a vague subjective impression of this kind.
"I find it interesting the website lamenting its death only shows screenshots [2][3][4] of the "advanced" editor, rather than any successful applications made using Dylan."
There weren't really any successful applications made using Dylan, if you mean shipping products. It never got that far along.
There were projects written with Dylan that were successful on technical merit, but never shipped for reasons that had nothing to do with their technical quality. For example, the final review of bauhaus told us that we had met and exceeded every metric of success, but Apple management just didn't want to ship a Lisp OS for Newton, full stop.
But yes, Nextstep was dogfooded to a degree that Dylan was not, and it was much farther along than Dylan ever was.
"There were two teams fighting for delivering the OS, one using Dylan, other using C++, eventually the C++ team won the internal politics, even though the Dylan one was relatively ahead."
This characterization is misleading in a few ways. I wouldn't say the teams were fighting, and I wouldn't say the Dylan team was ahead, except in maybe a couple of narrow areas.
Initially all Newton development was done in Dylan (called "Ralph" at that time), except for work on the microkernel, which was C++, and the 7 "bottleneck" graphics routines from QuickDraw, which were C.
The Newton team did substantial work on the software system in Dylan, and it worked, but there were some objections. Larry Tesler objected that it was too much like a desktop OS and needed to be redesigned for a handheld device with touch input. Meanwhile, some discussion took place with John Sculley during one of his trips to Japan and when he came back he ordered Larry to move main system development to C++. Larry did so, but reserved a small group of programmers (of which I was one) to continue experimenting with Dylan to see what we might accomplish.
We accomplished too much: we ended up making a whole second OS in Dylan. That's not what Apple management wanted, and they canceled our effort. That was no surprise to me; what surprised me was how long they tolerated our experiment before pulling the plug.
Then again, Apple in those days was a sort of constellation of skunkworks projects. Apple engineers would go off in random directions when not under threat of looming deadlines, and cook up all sorts of wacky things, and it was sort of tolerated because sometimes those wacky projects turned into things that made money.
"> The platform which Dylan was originally designed for, the Newton had no C to begin with.
These platforms had no development tools. The firmware and software runtimes were created outside. I would guess that there definitely C was involved for much of the firmware and that an on device Dylan runtime had C and assembler code."
I don't know of a Newton platform for which C tools did not exist.
The Newton originally targeted the AT&T Hobbit (https://en.wikipedia.org/wiki/AT%26T_Hobbit), which was a RISC chip designed to run C efficiently. By the time I was recruited the boards were using ARM chips, but the Newton microkernel was already written in C++. Perhaps there was a time when a Newton existed without a supporting C compiler, but I never saw it.
Now it might be that you meant that no C compiler or development tools ran on Newton hardware, and that much is true. The Dylan development didn't run on the Newton hardware, either. All dev tools ran on Macs and cross-compiled to the ARM platform.