If an OS update gives me a better allocator, I want every app to take advantage of it. Same idea with other libraries, if I update a library for reading zip files to make it go faster, or to fix a vulnerability, I want every application that uses that library to take advantage of it.

This is a debatable position. Linux distros usually do this, but a lot of modern applications ship with all their dependencies. I'd say the former is more efficient and generally better from a user perspective and the latter is more stable and is generally better from a developer/maintainer perspective. Open source encourages the former, proprietary software encourages the latter.

How does the memory allocator statically linked into the application request a new memory allocation into it's address space (sbrk or VirtualAlloc etc.)? Allocating memory will in most cases involve calling into the kernel, it's kinda a core function of a kernel. It has to have some link externally to the programme, directly or indirectly.

Userland system DLLs need to allocate memory too.

And when you are running more than one application at the same time how is that supposed to work?

In 20 years we'll have finally reached the logical conclusion to all of this that there shouldn't be separate os components you link against and your "OS" will just be manager of lightweight VMs.

Now you can just ship the user your machine and software can theoretically be immortal.