Why not load a whole kernel into firmware?

Answer 1

Many of the embedded systems like mobile phones and washing machines do carry the entrire kernel in firmware.

In the case of computers, if you put the kernel in the firmware, then it becomes pretty hard to upgrade and update on a regular basis. Imagine changing the chips in your computer every time a new version of Windows or Linux was released!

Answer 2

The firmware these days is usually a full fledged operating system i.e.
kernel + system utilities + helper programs

e.g.

Motorola/ Nokia mobile phones, linksys wireless routers, some dlink routers/ layer 3 switches, and many many other products.