Why would Taiwan avoid this arrangement? Obviously, Taiwan would like to preserve its democracy, but at some point Taipei will have to reckon with the economic realities of the region and relative American decline. Could Beijing ever formulate a version of "One Country, Two Systems" that would work or are the downsides too great for Taiwan?
There don't seem to be takers in Taiwan for this slogan/approach anymore. Quoting Wikipedia:
In January 2019, Xi Jinping, General Secretary of the Chinese Communist Party (CCP), had announced an open letter to Taiwan proposing a "one country, two systems" formula for eventual unification. President Tsai Ing-wen responded to Xi in a January 2019 speech by stating that Taiwan rejected "one country, two systems" and that because Beijing equated the 1992 Consensus with "one country, two systems", Taiwan rejected the 1992 Consensus as well. Tsai expressed her solidarity with Hong Kong protesters, remarking that Taiwan's democracy was hard-earned and had to be guarded and renewed. Pledging that as long as she was Taiwan's president, she would never accept "one country, two systems", Tsai cited what she considered to be the constant and rapid deterioration of Hong Kong's democracy over the course of 20 years. Following the landslide defeat of the KMT in the 2020 Taiwanese presidential election, KMT chairman Johnny Chiang rejected the "one country, two systems" as a feasible model for Taiwan. In 2021 the KMT platform under newly elected chairman Eric Chu also continued to include the 1992 consensus while rejecting "one country, two systems".
Neither the DPP nor the KMT seem to like that phrase anymore. And the Wikipedia article on the "1992 consensus" suggests that latter term has become contested as well, in terms of what it means/meant. The general public in Taiwan nowadays seems to see it as meaning two countries:
When asked which version of the Consensus a citizen would like to support, most (75.1%) [of Taiwanese polled] endorsed the view that PRC and ROC are two different countries. Ironically, this might be the exact statement (cross-Strait as country-to-country relations) that founders of the Consensus tried to prevent in the first place.