Large chunks of Vanguard and Blackrock are in index funds. So no amount of realisation about toxicity or heartfelt revelations on the part of Vanguard and Blackrock are going to change what those chunks are invested in.
They can always create a new index and a fund that follows it. But getting people to buy into such a fund is much harder then a fund following some well known index.
And new indices get created all the time, plus funds that follow those indices.
You often even get new indices specifically created to be easy to invest in (instead of optimizing for the older goal of being some measure of overall market performance.)
Vanguard and Blackrock don't necessarily dislike that their hands are bound with the indices. That avoids lots of thorny political problems.
