It probably could, but heat sterilization (like used with the liquid) probably hurts the powdery texture. Something like gamma-ray sterilization would likely work, but “We zapped this baby food with lethal levels of radiation before we sent it to you, for your health” seems like it’s going to make some moms uneasy.
Apart from what others have said, it’s more that the liquid version NEEDS to be made sterile during production to be safe, while the powder doesn’t. Sugars and nutrients in water sitting on a shelf make fantastic food for growing bacteria, so you need to make sure it doesn’t have a single speck of microbe before you ship it out of the factory. It’s much, much harder for bugs to grow in dry environments, especially with high sugar content (dry sugar sucks the water out of things like bacteria), so you can let dry formula sit on a shelf without issue. However, once you add water to the powdered formula, you need to use it pretty quickly to keep it safe.
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