USE flags have some inherent “issues” or rather downsides that make them non-options for some distributions.
First, they create a much larger number of package variants, simplified 2^(number of USE flags applicable to package). This is fine if you don’t want to supply binaries to your users. Second, the gain they bring to the average workstation is rather insignificant today. Users usually want all functionality available and not save 30 kb of RAM and then suddenly have to rebuild world because they find out they’re missing a USE flag that they suddenly need. Also, providing any kind of support for a system where the user doesn’t run the binaries you provided and maybe even changed dependencies (e.g. libressl instead of openssl) is probably impossible.
It’s very cool stuff if you want to build a system very specific to your needs and hardware, and I do believe that NixOS could have profited in some parts from it, but I don’t have specific ideas.