Conspiracy theory, coming from a 1520 user -- since we've been battling both this terrible touchscreen sensitivity issue, where it registers swipes as taps or taps as double-taps, and strange screen dimming behavior on the 1520 since it came out, maybe the Icon was experiencing the same problems, leading to its months-long delay while Nokia tried to address the issue? And perhaps they found the problems were related to the glance or double-tap to wake implementation, and are working around the problem on the Icon by pulling these features just so they can finally get it to market?
It's rumored the 1520's new firmware, available via the NCS but not yet released OTA, fixes the problems. If so, maybe the Icon will get a similar firmware update soon that fixes the issues and adds glance and double-tap to wake back in.
Hardware-wise, there really is no plausible reason for its omission, since it's been done on phones with similar screens (AMOLED, 1080p) and even smaller batteries, and I don't buy ppi having any relevance to it. I've always run glance in Always On mode on both my 920 and 1520, which both have LCDs, and found its effect on battery life to be surprisingly negligible.
Personally, I find it to be an indispensable feature, as I love "glancing" at my phone to see what notifications I have waiting for me, as well as the time; it alone is reason enough I wouldn't consider switching to a Samsung or HTC WP phone.
J.R.