Actually, CW decoding is widely in use in contesting - it just isn't running at the competitor's PCs.
The skimmer software in use by the Reverse Beacon Network do an awesome job of detecting and decoding CW stations calling CQ. As the network as grown, the skimmer software has been able to increase accuracy by adding quality filtering based on multiple skimmers spotting the same or similar calls, etc.
So, most stations entering the Assisted or Unlimited categories (like me) in contests are taking advantage of CW decoding that integrates right into their contest software - but for search and pounce, not for calling CQ and decoding the pileup.
That's a much tougher problem and so far, software on a PC can't do it well enough to be better than an average (at best) CW operator and cloud-based approaches have too much latency to be beneficial.
Doesn't mean technology will never solve the problem, but despite years of solving the easier decoding problems, we still don't have voice skimmers or CW pileup decoders that work under real signal and band conditions.
73 John K3TN