I am just suprised that there is not an industry standard way for doing making a custom embedded solution without having to have custom hardware. It seems like the IOT era is making this feasable for WIFI enabled devices, but all I can find for standard hardware are development boards, though the ARM MBED boards look to be the most promising.
What would that even look like, though? Every product has vastly different MCUs and peripheral arrangements (and power sources!). The "hard" stuff (relatively speaking) is designing and interfacing with the application-specific circuitry. The "easy" stuff is the microcontroller PCB layout.
If you're talking about having industry-standard microcontroller "base boards" that you plug into your application-specific design, you've done nothing to eliminate the hard (and application-specific) work; all you've done is built a yet-another-dev-board that breaks out the microcontroller to some pins. That's stuff that any competent electronics engineer can design in her sleep.
Note that if we're talking IoT-based products that are running Linux, there's substantial work to building out a design with an application processor and RAM. But — free market to the rescue — many vendors provide SoM (system-on-module) solutions that are essentially processor daughter cards that you solder or snap into your application-specific design. So, in many cases, that's already a thing.
Now if you're talking about a general-purpose board that has all the peripherals on it and can be used for anything, how on earth could you ever make a "standard" microcontroller board, when there is no "standard" IoT product? Touchscreen coffee makers, surveillance systems, and low-power sensor networks are examples of vastly different IoT products with vastly different hardware.
I think you need to think a bit more about the diversity of what an "IoT Product" looks like — and the diversity of hardware designing that goes into that — before you question why we bother designing hardware instead of just standardizing around one solution.