That’s… not how it works. IP issues aside, you can’t just toss two game engines in a blender and expect anything that works even half-way to come out.
Source is modular, but not THAT modular that you could literally toss out the BSP format like that. Not to mention, even if you could, you’d have to find some way to make the ‘new’ map format use vmts and mdls instead of the current Avalanche file formats, or just toss the current mod tools riiiiight out the window for good, which combined with the loss of Hammer’s interface due to the new map format would of course lead to things like Black Mesa not being made anymore because all the veteran modders would have 0 experience working with the new tools and thus be releasing subpar work until they had time to become more comfortable with the “new” Source engine.
Why even Avalanche?
Once again, Source and Avalanche are built for different types of games, and I don’t think we even know the specifics of how Avalanche is built.
Valve is very capable of creating their own engine. Trying to just “merge” another company’s engine wouldn’t just “take time,” it’d just be a friggin’ storm of issues, and almost definitely wouldn’t even function.
For now, the devs are just gonna have to deal with the edict limit. They chose the make the mod in Source so they accept Source’s limitations.
Entity limits can be changed but we are running right at the max for most levels.
Go read the white paper/ GDC presentation on LD2 gib system. We looked at doing it and while really cool would be a lot of work for a small return. It would really only be useful with the zombie SCI. But if you did it for them you would have to do it for all the creatures. Which means you have to build all the subsystems that would show off the innerds when you blast them. That is a lot of work…Then you have to integrate it with our version of the engine. If we had a unlimited budget and lots of extra people…
You’re right it definitely is too much work for too little gain. I have one small question though. What engine does Left 4 Dead 2 use and how did Valve get past the limitation of the gibbing system in Left 4 dead 2?
Left 4 Dead doesn’t cram as many entities into its maps, so it probably isn’t too hard to avoid reaching them. It’s also a different engine branch, which may or may not have different limits.
Oh I see thanks for answering my question! 
In fact, most of the Infected AI count as a single entity, because they’re all managed by a single “Director” AI rather than acting as individuals. That’s how they were able to get huge swarms of infected in the game at once.
I always wondered how they where able to do that, and now I know thanks for the extra tidbit of information.