And the reason we have "dependency hell" in packaging is because software developers never take advantage of this. If applications would use dlopen() with versioning (a real thing that has existed for a while now) to load the specific version of the library they want, we could install 1,000 different versions of a library in our systems today, no problem at all.

For different apps to use different versions of dependencies but still interact with each other, they would need strict rules about how to use interfaces to different versions. You obviously don't want two different programs that use two different versions of a library to talk to one another, because what if version A has a different schema than version B? Unless there was a very specific way to pass along interface information between two programs, so that they could independently handle changes in their interfaces.