Ansible, Chef, Puppet and co existed long before Terraform. If the stateless way would work better, these tools take over the cloud infrastructure space. But they didn't. To me it seems like a good sign that the their approaches didn't fit to infra.
Additionally, one of the biggest terraform selling points in the early days was the change plan feature. The ability to see the entire change that is about to happen as a result of a config change. I don't think it's easy to implement such thing in a stateless system.
Is it possible to create a stateless config for a subset of the resources/providers with a better functionality? Absolutely! Octodns seems like a good example. Another great example would be any of the serverless frameworks out there that do a much better job than Terraform at managing the lifecycle of the functions. But can this approach be applied to every provider and resource?