Yes, that's a kind of disappointment. It was a very good use case for type aliases, and we really wanted to this in 1.1. But:
Problem with type aliases declared in classes and interfaces is that they can capture type parameters from the surrounding scopes without capturing the receiver.
Now, we can't introduce type alias constructors for such type aliases, because we don't have such entities in language (they correspond to static members in C# and "species static" in Java 10/Valhalla).
Introducing them right now requires some more design effort (mostly related to value types, specialized generics, and "species static" mentioned above), which is still in progress (and, sadly, will not be ready for 1.1).
We can't "just allow non-top-level aliases now with limited capabilities, and extend that functionality later", because, sadly, that would be a breaking change in call resolution.
So, the only option we are left with now is to allow top-level aliases only, and introduce non-top-level aliases later as specialized generics and "species static" are done.