Our starting assumption was "Imagine I give you for free the perfect trash picking robot control AI software." If AI can deliver that, why can't it figure out how to take a Boston Dynamics dog, design it for trash picking, and optimize manufacturing costs?

Two different answers:

1. The discussion setup where you imagine a counterfactual is given by magic does not entail that magic can do any other thing you choose.

“Imagine I give you $100, what do you spend it on?”

“A McClaren, since you could have given me $300K”

2. Taking your question directly: because these are not closely related problems.