so now the main problem is building the hardware, there are a lot of solutions for the software part.
Before there were no general-purpose simulators, and barely usable computers (2 MHz computer with 2 KB of memory...), so all you could do was hardcoding the path and use rather constrained algorithms.
I think there is also a distinction to be made between offline (engineering) and onboard computing resources. While onboard computers have been constrained in the past, control algorithms are typically simple to implement. Most of the heavy lifting (design & optimization of algorithms) is done in the R&D phase using HPC equipment.
Mass-produced hardware drove prices down, and availability way up, in many industries: motors, analog electronics, computers, solar panels, lithium batteries, various sensors, etc. Maybe reusable rockets, enabled by all that, are going to follow a similar trajectory as air transportation.
While cool and all, this type of sim is a tiny, tiny slice of the software stack, and not the most difficult by a long shot. For one, you need software to control the actual hardware, that runs on said hardware's specific CPU(s) stack AND in sim (making an off the shelf sim a lot less useful). Orbital/newtonian physics are not trivial to implement, but they are relatively simple compared to the software that handles integration with physical components, telemetry, command, alerting, path optimization, etc. etc. The phrase "reality has a surprising amount of detail" applies here - it takes a lot of software to model complex hardware correctly, and even more to control it safely.
It would seem to me that Intel and AMD were not friendly to custom designs at that time, and MIPS was not significantly evolving.
A fast, low-power CPU that can access more than 4gb and is friendly to customization seems to me to be a recent development.