That's why we have Thread. Wifi just isn't a very efficient protocol for using with deep sleep. The radio takes more power to run, the overhead of connecting is higher, and the device needs a full IP stack. Even with power save mode (if supported by client and AP), the radio is on for hundreds of milliseconds to send a message.
Thread has "sleepy end device" profile built-in where the hub will queue messages and expects the device to be in deep sleep most of the time. And since it doesn't have so much overhead, the radio only has to be on for tens of milliseconds.
Take a smart scale for example. Mine uses wifi and is in deep sleep almost all of the time. When you step on it, it weighs you, connects to wifi, and sends the measurement. This does fine on battery because it only gets used a few times a day max, and I think it may power up the radios to look for a software update once a day or something. If it had to power up the radios every 5 minutes though it wouldn't last a year on a charge.
Another example would be a water/flood sensor. The overwhelming majority of the time, it has nothing to report. Maybe once a day or so it should report the battery level and that it's still there. You can still get great battery life as long as you don't have to turn on the radio all the time, but Matter doesn't really let you do this, in my understanding, at least as of the current revision.
I think you're right that this won't work well with a CR2032, but if you're careful about using good voltage regulators it can last a long time on 4 AAs.
That's what Thread is for.
The problem with these wifi based sensors is that you eventually run out of IP addresses (yes you could get fancy with subnet setup but still). Another problem is that at some point you might want to swap routers -- I had to swap out a faulty Netgear router, and the re-set was a major PITA. For these reasons I've been moving to Zigbee.
But your criticisms are strange. You have more than 254 devices connecting (which implies a complex setup) but can't increase the subnet size? Or does your router just have an absurdly small default DHCP range?
I also don't understand the swap your router problem, unless you're also using default SSIDs and not changing it. Configure the SSID and PSK to be the same as before and everything will just work.
Bandwidth and interference will likely be an issue far before ip scarcity.
What might be a problem is the number of devices that can be connected. For example someone who is using an Xfinity Gateway for their WiFi has a limit of 100 devices on each band (2.4 GHz, 5 GHz, 6 GHz) if they are on an XER10, XB10, or XB8. An XB7 can have 75 on each of 2.4 GHz and 5 GHz. An XB6 can have 30 on 2.4 GHz and 75 on 5 GHz.
That's enough for over 250 networked widgets to be concurrently connected with IPV4. That's a lot of widgets for one home.
If a person is getting into the realm of having a home with more than 250 networked widgets and addressing is becoming problematic in ways that are beyond their understanding and/or ability, then:
I might suggest that this is roughly equivalent to any other household thing that a homeowner doesn't fully understand (or that they don't want to understand), and that it would be completely fair to remind them that it is perfectly normal and acceptable to hire a qualified person or company to -- you know -- look into that for them.
(It's ok to hire a plumber, or a roofer, or a painter, or a cleaner, or any number of other professionals to help with making stuff work. It's also OK to hire someone to work on the network.)
The device type catalog is also somewhat limited, for example there’s no garage door device type.