"You" was the plural of "thou." Now "you" is both singular and plural, according to context, and "thou" is an archaic form meant to indicate formality (which was done previously by pluralizing "thou" to "you" per the T-V distinction). We also have many new forms to indicate the explicit plural "you" eg. "y'all."

So maybe we use singular "they" but add a new "th'all" for the plural to keep everyone happy.