Gnomes, I think, missed the boat on being a first-round race. Elves, dwarves, and halflings were all established really early in the games run as distinct classes. As classes, they needed to be complete characters: there's a bit of chicken-and-egg here, but like most early DnD classes they were designed to emulate specific characters from fiction, but rather quickly were expanded into entire peoples.
If gnomes were included that early, I feel they would be just as established. But that would need there to be a popular gnome character to emulate. I don't know of any such character, but I'm not an expert on the history of fantasy fiction.
Race as class started with Holmes, which came out when AD&D started coming out, so gnomes coincided with that timeframe. However, I think the central premise is still pretty spot on.
Thinking back to playing AD&D and the basic-classic line back in the day and frankly, no one played anything other than elf, half-elf, or human unless there was a specific reason (usually RP). Humans had unlimited advancement and open class options (and their own form of multiple classing). Elves and half-elves had level limits high enough to usually not be an issue, had some of the good multiclass option (especially in 1E, where a fighter-magic user could cast in armor), and elves got longsword/bow bonuses while half-elves could be classes no other non-human could be; plus over in basic-classic elves' race-as-class was a pretty cool fighter-mage concept you otherwise couldn't do in the core rules. Compare that to dwarves and halflings and gnomes*, and it's just a niche situation where you choose them based on the game mechanics. Halfling thieves were on par with H, E, or 1/2E, and also fit the Bilbo Baggins motif. Dwarven fighters had some decided limitations** that depended significantly by which TSR-A/D&D used, but if you could handle them you could make a half-decent fighter and that also fit the Tolkien dwarven aesthetic. And then you had gnomes which... well, they got darkvision and magic/poison bonuses like dwarves and could be illusionists (and let's be honest, exactly how often did you play illusionists either?). That just wasn't a schtick big enough to build a race around. Sure, you could play a gnome thief, but that would be horning in on an already iconic halfling thief motif, and didn't really offer much that a dwarven thief couldn't already do. There's just not a central iconic concept for them as robust as dwarf with axe or halfling sneaking through shadows to prevent them from being overshadowed by TSR-era D&D's incentivization of 'when in doubt, consider human or elf.' Twenty-six years later, they could have with 3e done something with gnomes to give them a distinct identity, but by then they were decidedly also-rans and no one had a lot of will to do so.
*and half-orcs, for that matter, and they really fell into the 'only saw them when someone wanted to try a cleric-assassin' camp.
**although armor tended to already limit fighter speed, making the the biggest one -- dwarven speed --not be such an issue
Gnomes' hook seems to be 'wacky engineers' - which isn't the least popular hook but isn't as popular as edgy or dragon seems to be.
It, like Illusionist BITD, is enough to make a themed character around the concept approximately once per player (or so). You might play dwarven fighters or elven gishes constantly, pirates or swashbucklers or gunslingers or pajama-ninjas every 3-4 years when you get the yearning, maybe something like a total pacifist or 'can I play as someone else's pet dragon?' twice, but 'wacky engineer' or similar you probably try once, decide
'it was a fun novelty, and I don't regret it (my party might), but after the novelty wears off you're trying to clear a dungeon or solve a serious adventure with a walking joke.'
