Atom 1.0 will be in WP 2.2 -- Matt checked in some patches already. And patches have gone in for APP support as well.
A decision was made early on about the inclusion of Atom 1.0 in WP 2.1 (namely: that it wouldn't be). It made sense at the time, but as the release date slipped (and slipped, and slipped), the decision wasn't revisited, and the people who were pushing it in early 2006 didn't really speak up until after 2.1 was released.
2.1's development cycle was far from ideal, and it's something we're trying to fix for 2.2 with a defined release date and easy ways for end users to voice feature suggestions. Because the development cycle will be so much shorter, there is less of a chance that early decisions will look outdated at the end of the cycle.
The above is just my take on it, and my level of influence on the project was much lower in early 2006 than it is now, so I'll ping Matt on this and he can give you his take.