If developers really wanted to speed up the execution times in their programs, they're not stuck with just writing only standard C++ as you would implicate
You can optimize for other things than speed. But the gist of what I'm trying to convey is that hand written assembly and binary output of "unapproved" compiler is the same from the point of view of, well, everything. Including security.
Do you even know what an operating system is supposed to achieve from a security standpoint
I do. Your statements sound like something I would confidently (and incorrectly) write online some twenty years ago. So I get it, you think you know your stuff - we've all been there.
Originally console games were running pretty much bare metal. Even early consoles with "rich" experiences - like Xbox 360 - were essentially replacing OS with a game on launch. Game was linked to a stub of system services that were universal for all applications (things you could access from guide button).
Since 360 had access to Live, there was much more emphasis on binary analysis. It was a big no-no to have any sort of self-modifying code (you couldn't make writable memory page executable) so JITing for instance was not possible. Plus: it was much harder to publish on a console in 2005 than it is today.
This security by obscurity was pretty much phased out and consoles today are running full blown OSes with a hardware-anchored chain of trust that's used to validate binaries. You've got multitasking with all its benefits and drawbacks and all major consoles are running a cut down version of a generally available OS (Windows or FreeBSD).
Privilege escalation is not the only security feature of operating systems running on consoles and it's not even the most important one. Consoles are locked down and the most important thing OSes are doing is aforementioned binary validation. But we can agree to disagree on what's most important, it's not impacting reality what you or I think is most important.
It's mininformation to insinuate that it's the job of an operating system to cover up/work around the security problems posed by potentially buggy compilers or other user space exploits ...
All compilers are buggy, what does it have to do with anything discussed here? No sane developer with access to devkit is going to deliberately build a game that makes it easy to exploit console. Historically most of the vulnerabilities found in games that were used to run homebrew came from custom data parsing code (savegames typically). This buggy code would be buggy regardless of C/C++ compiler used. Preventing someone from using clang instead of msvc changes nothing. On the other hand letting developers write data parsers in safer languages would make life much easier for the platform holder.