I've just been looking at this “Labview”. [...] Then I looked at the price. Are you 'king insane? Two and a half grand?
LabView is a very nice product which is reasonably priced. It was built to allow laboratory scientist with no ambitions at programming to connect together laboratory gear (the price of most is above what you pay for a small car and ends with stuff you can build a house for) and do their science stuff without bothering about programming. And it was successful at this and totally worth the price.
On the other side is Lego Mindstorm which is another very fine example of making robotics available to people not interested in the details of electronics or programming. Don't discount the product simply because Lego produces it and is marketed as toys.
What both products have in common is that quite a lot of work has been invested to make those products so. Also interesting is the fact, that there aren't many free solutions with a similar focus that actually work as well. You can take this as a sure sign, that either the need for such a thing is only limited to the people able to write it or that the commercial products serve the market well an cheap enough or that the complexity of such a task is higher than one would assume. Most likely a combination of all three.
Didn't you understand that the Lilypad is essentially a hobbyist platform, which occupies only a tiny percentage of most people's otherwise busy weekends?
Your perspective is rather irrelevant to the people selling and producing the stuff. If the makers of the Lilypad don't provide an easier development platform, this means that either the stuff sells well enough as it is or that the effort of making a better platform doesn't promise to generate enough additional sales to warrant the risk to invest into it. That's basic business logic for you - don't invest to lose money. And as stated above, people don't seem to be too keen on investing their spare time to create an open source alternative either. So you're a bit out of luck - those people you pay aren't interested in making it easier for you and those giving it away for free neither. That leaves you with just three solutions: Start creating something better on your own, get used to what you have or look for another platform.
The syntax is bafflingly bad. It needs to be easy, more forgiving, rather than the strict authoritarian dictatorship that is C, which will only actually work when every single letter of every single word is right, and all the words are the right words. You could be guessing forever.
Yes, it's bad, but it's a standard many people know in all it's ugliness and there was a ready made and working solution to program the ATmega chips. So the Arduino developers just took that as it is and spent their time on things they considered more important. As to guessing for ever, you don't seem to get it: There's no guessing at all in C. It's all documented and available for inspection. I agree that this documentation isn't very easy to understand for beginners, but it's all there. And there's also tons of material to learn it. And once you get the first understanding how C (or most other programming language for the matter) works, things become easier. Just like with HTML, you need to have some idea how things work and then you can copy and paste, steal, be inspired from other people's code. It has been done in C for the past 40 years or so and there's a tremendous amount of resources available which can be used on the Arduino.
Getting a new piece of arduino code actually working with the hardware becomes tantamount to winning the lottery, for the novice. Give up. Throw all the arduino hardware in the bin and resign yourself to failure. Find something else to do that actually works, for a happier experience.
That's like saying crossing a street is a deadly gamble and surviving is pure lottery. It is if you're a blind chicken who doesn't know about cars and traffic lights. Once you understand how cars move and what the coloured light mean, crossing a street becomes predictable and moderately safe. You seem just a little frustrated because with programming and electricity you haven't reached the point where you can identify the import data from the irrelevant and understand properly how to fit the pieces together.
If you stay with it, that point will come faster than you expect and the forum here is a great help to point you the right way in case you're lost. I find it also helpful to read what problems other people have and what kind of answers they get. It gives a very quick overview what the common problems are and things to check first when I run into troubles.