The vehicles with a higher automated driving rating than Tesla use a more diverse range of sensory inputs. While it may not make fully autonomous driving, it very clearly would have made Tesla closer to it based on the fact that cars that use things like lidar in addition to cameras surpassed Tesla's rating many years ago.

It is. The machine learning algorithm has maxed out its parameters because Elon decided to get rid of redundancy. The machine learning algorithm had to invent new algorithms to do what redundancy would have easily done in far fewer lines of code. They are out of compute power BECAUSE they decided to cheap out and removed redundancy.

Have you seen Waymo?

We already have road legal level 4 self driving cars for sale in Germany (Mercedes EQS and S Class), level 5 isnt far away.

If Tesla didn't go the vision-only route they would probably also have level 4 autonomy by now

It is to some degree. Lots of other new cars have lane keeping assist and automatic braking, BLIS, adaptive cruise control etc, and so on with more capable sensors and can for the most part drive without input from the driver better than the Tesla models with ultrasonic sensors or simply cameras. In fact the ones that rely solely on cameras absolutely do reportedly perform worse in testing. Musk was insistent that they could cheap out on the types of sensors used in order to make more profit and it shows. I don't think it's that tech cannot handle self driving currently. I think that it's a numbers game where the firms attempting it want to do it as cheaply as possible while promising the moon and stars which they can't deliver on a cheap budget. Vehicles like Ford's (Blue Cruise) use all kinds of sensors including radar and GPS to allow for handsfree (not self driving) and it does work. The proofs of concept are out there in the world, but the costs to go from something like that to full self driving just doesn't make it feasible for the average car manufacturer.