This actually is one of the approaches that people are trying now: extract instructions to LLMs into a document and use it for versioning.

The problem with it is purely practical, "compiling" a thorough spec for a large project can be expensive, and the result might not be great. If anything, this reminds me of the earlier days of computing. One similar example: the original Macintosh OS was initially written in a Pascal dialect, and then the resulting assembly was modified/optimized by hand because the compiler was not good enough.