Usually when a dev studio says “budget”, it’s primarily a time budget, not just money. Yes, money can be used to hire more staff, but everything we know about software development says that output doesn’t scale linearly with man-hours.
Fixing hats in the way they would like (which isn’t just the modded method of having ears or parts of heads clip through whatever hats/helms exist) would require them to go through every headpiece created so far and rework them for the races’ head shape. Is it possible? Yes. Is it the best use of their time and effort? Probably not. It’s a live game; they’re always pushing on for the next bit of content.
You’re right, I guess I wasn’t thinking it all the way through. Guess it’s up to SE to decide if they want to hire more artists and spend their time polishing bits of older content.