Personally, I've liked gnomes for some time, and played quite a few. I dislike their excision from the PHB, but I welcome the Mohj...er...
Dragonborn.
Some comments of my own:
1) Tinker Gnomes = "Steampunk" is a false statement. Its not even close to true.
Even the humans of a given world with typical fantasy tech are working with cogs & such- quite a bit more clever than most people give them credit for. Remember the temple of Ammon at Thebes (from
http://www.worldwideschool.org/library/books/sci/history/AHistoryofScienceVolumeI/chap39.html):
We may add that the principle of the whistle was a favorite one of Hero. By the aid of a similar mechanism he brought about the blowing of trumpets when the temple doors were opened, a phenomenon which must greatly have enhanced the mystification. It is possible that this principle was utilized also in connection with statues to produce seemingly supernatural effects. This may be the explanation of the tradition of the speaking statue in the temple of Ammon at Thebes.
DEVICE FOR CAUSING THE DOORS OF THE TEMPLE TO OPEN WHEN THE FIRE ON THE ALTAR IS LIGHTED (Air heated in the altar F drives water from the closed receptacle H through the tube KL into the bucket M, which descends through gravity, thus opening the doors. When the altar cools, the air contracts, the water is sucked from the bucket, and the weight and pulley close the doors.)}
Automatic doors and trumpets, thousands of years before the tech level of your typical RPG setting, done by humans.
Why not gnomes?
2) "Elves" as a term has just as much confusion as "Gnomes." Elves are the baby-snatching masters of Underhill, represented by Titania and Oberon. Wait- they're the guys who make toys at the North Pole. No, they're the über charismatic dying race of JRRT's novels...
The original game's designers took the term "Elf" and gave it a game-specific meaning, drawing from all kinds of sources. This definition was basically followed by subseqent design teams. There is no reason that "Gnome" couldn't have gotten similar treatment than lack of desire on the designer's parts- clearly, there is a vocal group of players who like playing gnomes.
3) Why not make gnomes the tree-huggers, leaving the elves to be the top arcanists? Elves could have retained their preturnatural silence and well honed archery & sword skills without being a race of Park Rangers.
Like other D&D races, the nature-lovin' gnomes could have been a pastiche from a variety of sources. A little bit of "redcaps," a little Neibelungen, a little fey, etc.
Heck, they could have been a forest-dwelling subrace of Dwarves for that matter.
Or a toned-down version of Stargate SG-1's Nox.
The long & the short of it: by not giving the gnomes a clearly defined role designers let them wither on the vine. Its no wonder that gnomes lost popularity in 3.XEd- especially with the illusionist/bard switcheroo- and got excised from the 4Ed PHB.