I used to play Battletech online in the age of MUSE/MUSH/MUX. Realtime battletech in ASCII glory. I attribute most of my typing speed to that game.
That was MMO before Everquest. The source was uncommented (because the original author was a dick, and concerned with purity of the base), and it was nightmarish to run. Most of it was in MU* softcode.
That said, it had built-in support for a game as complex as DF, only in an MMO format. I picked up a copy of the source and started to mess with it. I was lacking in skills to go it alone, so I brought in a team to help me. It never launched.
Every time I had a cool idea, I'd get told how it could never happen, no one would ever play it, etc, etc. Most of my ideas were for a game like DF - built a base, stand against all comers, if you get wiped out start over. Persistent world, the whole shebang.
It's clearly a model that's been successful for Toady and my hat is off to him for that. He has a designed an epic piece of entertainment software that's engrossing and immersive. He's done that with an ASCII alpha release, to boot.
OP asked why this is still an indy game when it's so awesome (and, it is assumed, deserves a full production budget).
This is the wrong question. The question is: Why is this game so pure to its vision, and therefore so unapologetically awesome? The answer is: Because it's a solo indy project being written to please no one but the author and sold only for its market-perceived value.
There's a small part of me that would like to see Toady with an entire dev team at his disposal. But RL has a UI that's even more abstracted from the minutia of production than DF does. He wouldn't even be able to give orders for specific components. There's only the 'Build game' order, and he would have to keep grinding at it until he got the project he wanted.
Then there's the issue that DF just isn't mass marketable. It appeals only to a very small set of us who the bulk of the gaming industry wantonly ignore - to their financial gain. Games made for us don't sell well enough to justify the massive budgets necessary for their production. We're an impossible-to-please set because we want something harder to do well than graphics: good, vast, and deep gameplay.
tl;dr: If you want something done right, do it yourself.
As for graphics... the only games that come close to being as complex as DF /AND/ having great graphics? The Total War series comes close, but I think EVE: Online gets the award here. Keep in mind, though, EVE has its issues and its problems (not the least of which is that it's impossible to play casually).
DF is abstracted from that first-person level, though. After a while the graphics cease to be important - it's just information your brain needs to process to determine what's going on. ASCII does that very well, once you've adapted to the set. (And stop thinking mountain goats are goblins, because you've played enough other rogues to know that letters are groups-by-type, not groups-by-first-letter.)
I get the information I need to understand what's going on. At the speed and sheer quantity of information DF is? That's all I'd get out of sexy graphics anyway.