Why doesn't C# have lexically nested functions?

Question

Why might the C# language designers not have included support for something like this (ported from Structure and Interpretation of Computer Programs, second ed., p. 30):

/// <summary>Return the square root of x.</summary>
double sqrt(double x) {
  bool goodEnough(double guess) {
    return Math.Abs(square(guess) - x) < 0.001;
  }
  double improve(double guess) {
    return average(guess, x / guess);
  }
  double sqrtIter(double guess) {
    return goodEnough(guess) ? guess : sqrtIter(improve(guess));
  }
  sqrtIter(1.0);
}

Answer 1

In fact, C# has exactly this.

double sqrt(double x) {
    var goodEnough = new Func<double, bool>(guess =>
        Math.Abs(square(guess) - x) < 0.001
    );
    var improve = new Func<double, double>(guess =>
        average(guess, x / guess)
    );
    var sqrtIter = default(Func<double, double>);
    sqrtIter = new Func<double, double>(guess =>
        goodEnough(guess) ? guess : sqrtIter(improve(guess))
    );
    return sqrtIter(1.0);
}