Would it be fair enough to assume that the project has failed, or failing?
90% of Bitcoin being held by an oligarchy of the elite, a cartel of banks, and by governments working together might turn Bitcoin into their "playground".
It's not about 90%, if a particular agency controls 51% of an asset (be it bitcoin or anything else) then that agency receives the controlling power over that asset. Similarly if 51% of total bitcoin supply stays with a single entity, it will certainly become a playground for them and we common people will just be a small part of their game! This rule implies to not only bitcoin but on any asset, be it gold or anything else!
Also I see Franky raised a very valid question here by showing the bifurcation of taxing system! Even though it is a hypothetical scenario, but if we pay taxes using bitcoin, we will essentially hand over the controls to the taxing authority! However, this is how the world and our social system functions, we don't even have an escape pod available! Either we comply intentionally or we will be forced to comply! A radically different social and economical system may save us from such wrongdoings, but that looks like a distant dream, at least as of now!