This is a preparatory refactoring needed for future work such as #4203.

I've refrained from doing additional cleanups in order to keep this a
refactoring that mostly moves around blocks of code mostly
unchanged (except for whitespace), and make it easier to review.

This feature was originally implemented because its lack was complained
about by Stack/Stackage developers. However, after it got implemented it
was never really being used; what's more, it's causing us overhead for
no benefit as well as blocking us improving the implementation via the
likes of #4203.

Closes #3581