While I agree it would have been awesome if we had access to new-old Defenders post-1997, the economics didn't make sense at the time. Such updates necessary to continue to homologate the Defender were prohibitively expensive for Land Rover, too much to justify for the extremely small volume it was selling in the US. So actually, it left the US for all the right reasons as far as running a profitable business is concerned. Here's a great example of what it takes:
The 2019 Subaru STI S209 may just look like a modified Subaru sedan on the outside, but it’s technically a product of STI, Subaru’s motorsports division. When STI went to homologate the car to our crash and emissions regulations separately from Subaru, it faced one setback: the U.S. government...
jalopnik.com
"No exceptions granted due to small production volume." Subaru sells several times more vehicles worldwide than Land Rover does, but they still acknowledge they'll lose money on the S209. At the time, it was much easier to continue with the Discovery/LR series and Range Rover in the US because it was selling in higher numbers and was easier to homologate. Even in its later years the last-generation Defender wasn't selling in sufficient numbers worldwide to justify spending the millions of dollars necessary to homologate for the US market.
Also note that emissions certification can take years as it also involves certifying the durability of emissions components. They began the program to update the Defender in the late 2K's. You don't just crap out new or updated vehicles and start shipping them to dealers, at least not in the US.