I look at the Chevy 350 and the LS1 as most an artifact engine. Its large, heavy, and makes inefficient use of space. Because of this though its relatively simple to work on and easier for a newcomer to tweak with and make repairs to. There are tons of engines out there that are better, more efficient, lighter etc but there aren't many that both have a reputation for being as easy to modify and work on as the LS1 and 350 and have the parts availability of the two engines. There other thing is that those 2 engines are really proven, all the little reliability tweaks that come from years of building the same engine ensures that the next iteration will not be a problem child. A new engine is a huge risk and its not uncommon for engines to have all sorts of really expensive problems when there is a design mistake or oversight. Every time you have to do a recall for head gaskets, crank shafts or some other catastrophic issue it does some serious damage to your brand and reputation.
I agree with you on the 350. It earns the right to be called "legacy." But the LS1 was rolled out the last year Acura made the NSX. Variable valve timing had been on production vehicles for seven years. The DOHC ZR1 V8 was a six-year-old design, out of production for two years. CARB standards were going up, not down, and efficiency suddenly fucking mattered. And the parts availability should be an order of magnitude more than it is: LS1 parts should fit on 350s and 350 parts should fit on an LS1. But they're mutually exclusive. It takes a company like GM to keep all the dimensions (bore, stroke, piston center, crank center, cam center, rocker length) yet ensure that the old parts don't fit on the new and the new parts don't fit on the old. Because you're right - a new engine is a risk. But Chevy rolled out a new engine that has all of those drawbacks and none of the benefits from, you know, designing something actually new.