We're getting pretty close. Lightning wallets like Zeus and Phoenix enable full self-custody on-chain and with lightning. I use it daily. Imo the main problem is that most people are unaware of how easy lightning is to use. They are operating off knowledge from 5 years ago where you had to run a lightning node, balance channels, etc. None of that is required now, or rather, it has become abstracted away. Go to /r/Bitcoin and similar and people think you need a PhD to use lightning.

Lightning's main pain point for new users is understanding "inbound liquidity" and "channel size". But really after you've sent a few transactions, it becomes second nature. No more complicated than understanding how to link venmo to your bank account and get them to talk to each other.

Hell, even Cash App supports lightning, that's like 30% market penetration in the US, though, of course, cash app is custodial.