VM are perfectly aware of the issues, and in some cases it's down to simple physics and money isn't really the issue.
Unless of course you can work out how to place more equipment into a site than its racks will hold, or how to ensure it can cool more equipment than the HVAC can serve.
Extending buildings, collapsing down hardware and upgrading cooling aren't simple, two of the three require planning permission.
There is another issue with regards to network rebuilds being needed, which are being done.
Project Lightning is pretty much irrelevant to this. The people digging the streets aren't the people who would be upgrading the HVAC, extending buildings, collapsing down racks or improving power supplies. Network rebuilds have to be done a bit at a time for risk of triggering a ton of faults. Even if there were unlimited funds there simply isn't the manpower to do all the work - BT can attest to that.
Appreciate it's frustrating and in a number of cases there should've been more forward planning but it's really not as simple as throwing money at the problem.
Regarding the numbers you quote, Project Lightning is planned to pass 4 million premises, it won't result in 4 million new customers unless every property signs up. VM do not have 7 million households as customers.
I don't recognise your £0.5 billion number for upgrading the existing premises passed, however it would be enough for a full DOCSIS 3.1 upgrade and a gigabit throughout. The upgrade 'budget' isn't a single budget. There is more than one upgrade train. One is the HVAC, etc, upgrades I referred to. The overbuild to upgrade local networks is another. Node splits, reducing the number of customer sharing bandwidth are another, the line cards customers connect to are another.
There is no way to upgrade local networks without causing outages. The equipment receives its power supply through the coaxial network, so can't simply be switched in, there is no re-routing path. You should have received a card through your door indicating there would be an outage if it was of all services - they messed up.
What can one do about it? Go elsewhere. It's always resolved my service issues both with VM and others.