With each side wanting their side to be dominant and to hold sovereignty in such a state. Israeli Jews were not willing to give up their Jewish national homeland and abandon the Zionist Project and Palestinians were still not willing to accept the Jewish presence on Arab lands (though that may be a minority view now)l
This was according to a joint survey in 2023 - before Oct. 7th. Palestinians no doubt would now be more practical and accept "less" while the opposite would be true for Israelis. Why give anything at all, when they are within reach of the ultimate goal?
Without some pretty improbable change of viewpoints, the one-state solution is just as impossible as the two-states. It also has a plethora of issues and dangers, not the least of which is bloodshed in a civil war when two such different peoples with a history of hatred are forced to live under one nation.
The only obstacle to the two-state solution - aside from the political will sadly lacking - are the settlements. Dismantling of the settlements, maybe some land swaps and re-absorption of the settlers into Israel proper would be daunting, of course. Those who argue that it is unrealistic to expect Israel to agree to such terms should be countered by pointing out that it is far more unrealistic to expect Israel to agree to a one-state solution that would effectively equal the end of Zionism and a Jewish national homeland. It will not happen.
I also don't think that Israel should be rewarded for its continued, long-standing bad behaviour vis a vis allowing the settlements. Agreeing to kill off the two-state solution, that allows both people to achieve self-determination and nationhood, because of a situation Israel willfully created, seems like letting the bully win.