Seq Bool and [Bool] aren't really correct Bits instances, let alone Bits a => Bits (Seq a) (the latter really only even starts to make sense for FiniteBits a => Bits (Seq a), because you have to enumerate bits.
I also think defining such SeqN types (which _are_ legal) should really be left up to the end user if they want them.
There are lots of points in the design space (Do you trim excess 0-bit only entries from on the right? Leave them? etc.) it involves messy types, and there is little to be gained by standardizing on one of them.
We don't have to include everything someone may someday want in base.
-Edward