The very earliest versions of ETH protocol were a counterparty-style metacoin on top of primecoin. Not Bitcoin because the OP_RETURN wars were happening at the time and...
...given what certain core devs were saying at the time, I was scared that protocol rules would change under me (eg. by banning certain ways to encode data in txs) to make it harder, and I did not want to build on a base protocol whose dev team would be at war with me.
And OP_RETURN *did* end up getting censored down to 40 bytes. So I think it's fair to say that this willingness to compromise protocol immutability to achieve a desired outcome in a particular application (hmm, sound familiar?) made ETH on BTC even then a nonstarter.
When we institute layer 2 on #bitcoincash I think we should just use ETH to handle the smart contracts - integrate api's or something K.I.S.S. why not use the alts on top of the layer 1 to boost the entire crypto community