as you can't throw out the window the popularity of CryptoKitties, however short lived it had been.
Yes you can, it was only popular because you could try to make money with breeding kitties. Very few people cared about it as a game, which means that this model wasn't sustainable and it was just a speculative bubble.
However, I really believe blockchain still has very big role to play in gambling industry. We are going to see new blockchain based superior gambling dApps in coming years which will disrupt crypto gambling completely by removing trust factor.
It won't really disrupt centralized gambling until full scalability is achieved. You can place hundreds of bets per second (and some people use it with official bots), without paying any fees in centralized gambling. And thanks to the provably fair system, exit scam is the only risk, which is pretty rare in crypto gambling.