Nikon reminds me of a world class race horse with the mounted jockey holding it back from pacing in front of the competition.
I don't think Nikon is holding back.
There can be reasons why it might make sense
not to make a camera like the D500; for example, along with a high end DX camera, the question of high end DX lenses pops up again. To satisfy all users, some additional DX high end wide angle primes would be needed, and a modern revision of the 17-55/2.8, with nano coating, perhaps VR etc. To simplify the product lineup Nikon may not have been eager to make the D500; only when Canon forced them to with the introduction of the 7D Mark II, did it seem that the project was put back on the agenda. The 7D Mark II itself took many years to make; Canon wasn't in any hurry, either. FX only would make the product lineup simpler in some way. But some users are very enthusiastic about DX and many people prefer it for budget reasons as well as the obvious telephoto action photography application. There are advantages to DX and disadvantages. For Nikon it would have been simpler to have one format for the high end, in some ways.
Along with making the D500, in my opinion, comes the responsibility to fullfill any lens needs that its users may have. E.g., wide angle primes with fast maximum aperture and no extra flare or ghosting due to oversize FX coverage. In my opinion this should be par for the course even without the D500. Many D7x00 users use it for family photography indoors and can use fast lenses. Today that means 11-16/2.8 Tokina and 18-35/1.8 Sigma, basically.
So, if Nikon makes DX and FX mirrorless cameras, then they would have five lens lineups to maintain (CX, two DX, two FX). Consolidating the product line makes perfect sense from a practical point of view, but of course users should be consulted as well.
