Hi Jeff,
Making MediaWiki usable by 3rd parties was Brion's initiative, but it never produced image of mediawiki that would have same feature set like the one we run on live site.
Of course, extensions used on live site are available to download, but I'm not sure everyone can have say.. math support on every hosting account. Nor mono with our lucene daemon.
On the other hand, we always run a version that is not even released (right now site runs on 1.8), and there are always features on Wikimedia servers that do not exist in rolled out packages.
I don't think php5 is such a menace as you've portrayed, big shops (such as Y!) use it, extensions are more developed for php5 than for php4, it's OO abilities allow more elegant code (and mediawiki is OO'ish), etc.
php5 packages are available for many Linux distributions (some have them in 'testing' branches, though) - I've been running php5 RPM on my Fedora (even FC3) boxes for quite a while.
If you think that distributions should have better support for MediaWiki, you can ask distributions to do that. They started doing mediawiki packages themselves anyway ;-)
Our primary mission is to run website, our secondary mission is to provide software and best practices. And those, surprisingly, include php5 in the list.
Domas