1. Lack of fungibility

2. Lack of privacy

3. Adoption by custodians that have an incentive to stay in business

4. Hard to achieve self-custody on second layer

5. No onchain scaling model that growth conservatively with progress in bandwidth, storage, latency, and processing power

The last point (5) is especially important as in combination with point 4 it basically is the reason why we have 3, that make 1 and 2 impossible.