Like what always stops urban roads - NIMBYs and probably a shedload of utility diversions that looked too scary to move.
In this case the NIMBY was Oxfordshire CC. who did not want Berkshire CC. to complete the Cross Town Route project (which even had it's own logo I have it on an old drawing) which would have extended the A329(M) from Sutton Seeds roundabout (where it crosses the A4) across the river and round to this point and encouraged more traffic to head north and south through South Oxfordshire using this route instead of the M40 or A34. It also faced environmental impact concerns regarding the river.
It pretty much died with Berkshire CC. when it got split up into the unitary authorities in about 1998 iirc, it's raised it's head a few times again when elections come round but the closest it got was when it was proposed to be a bus or public transport only link road, but funding then becomes the next problem. A303Chris was probably at Berkshire CC. at the time so knows the history better than I do.
They were thinking the A329(M) might eventually end up around there, but the temporary stub has been signed incorrectly with a 'sharp deviation of route' chevron. Whoops!
The red and white barrier marking would have been correct. Like this:http://g.co/maps/3vkzu
I don't think that's completely correct Bryn, that is a Direction 36 Temporary Sign so may be placed only in connection with the execution of works on or near a road or a temporary obstruction thereon.
Given the length of time those chevrons have been in Reading (as long as I can remember) it seems to do the job. I think a line of hazard marker posts with yellow reflectors would be the compliant way of doing it.