I don't think government regulations are the cause. There are VMW models that run a full/deep fill, including the commercial Maytag & Whirlpool models that don't have load sensing (AFAIK) or a water level control with multiple settings ... the only choice is a 1/2-ish fill (even if washing one or two items) or a Deep Wash full fill. And the Speed Queen TC5 which has the same (lack of) fill choices. Various GE, LG, and Samsung impeller models can do deep fills. So, it seems to me that water usage restrictions about which so many howl and complain isn't really a thing in topload washer design (except regards to the so-called "Normal" cycle which is the basis for EnergyStar testing).
I think a factor, as I heard going around, is the casting molds for direct-drive transmissions housings (and presumably gears) were deteriorated, and Whirlpool didn't want to invest in making new molds, along with the inherent costs of producing the transmissions and other drive components. VMWs are a much simpler and presumably less-costly design, which allows for keeping the production costs under some degree of control to attain price-points that consumers can handle. Notice the Speed Queen TC5 is much more expensive.
There were two revision efforts of which I'm aware toward the end of DD models to garner some reduction on water usage --
1) Automatic water level sensing. However, selecting Softener Rinse and/or 2nd/Extra Rinse triggered both rinses to be deep fills regardless of the load size, and opening the lid during the sensing process aborted it and went to a full fill for the wash.
2) Some models toward the end had an additional hidden water level control in the rinse fill circuit that restricted the rinse to a fixed low level.
