I am going to be objective and try my best to not be biased and include my own opinion.
You can see my name that I try to be optimistic about bitcoin.

There are two perspectives. The first perspective is bitcoin is living up to its promises and is censorship resistant and decentralized money. The government can't stop us from making transfers with bitcoin and they can't freeze out bitcoin or confiscate it.

The second perspective is that none of that is true. The government can confiscate and freeze bitcoin and stop us from using bitcoin in a way they don't approve. Regulations and laws will be enforced and they are increasingly coming after and giving fines or prison time to anyone who don't follow their regulations. From their perspective, saying bitcoin is censorship resistant is as big lie as saying we have freedom of speech because the government can't stop us from opening our mouth and speaking anything we want to, but that is wrong because the government has made a habit of punishing anyone who says something they don't like such as removing their licenses, censoring them, giving fines, prison, assassination, debanking.

Evaluating those two perspectives, it's easy to see that the first perspective is of course technically correct. But I don't think anyone can deny that the second perspective is also correct in terms of "how it works in practice".

In that case how did bitcoin fail with becoming censorship resistant in practice? The answer is easy, it's because bitcoin has no privacy. The tiny amount of pseudonimity is easily removed. It is also illegal to have privacy with bitcoin. If you have privacy that means you are not reporting to authorities how much bitcoin you have in which wallets and then you become a tax evader and that means you will end up spending a lot of time in prison in the future.

The only way to be censorship resistant is with complete anonymity. Without anonymity you can be censored by those who know your identity, which is the government. The governments use chainalysis to track everyone on bitcoin blockchain. And even if you manage to be anonymous and evade paying taxes without getting caught, it means you can't spend your bitcoin then because anyone who accepts your bitcoin without doing a KYC on you will be comitting a crime, at least in EU, and the rest of the world has similar laws because of AML laws are international everywhere. Maybe you can for the time being find a loop hole somewhere but regulations are spreading and tightening up those holes.

Bitcoin failed because it has no privacy. It was not designed with privacy in mind, it was designed to be regulated but not intentionally because Satoshi really did want bitcoin to be censorship resistant. It was supposed to be a digital revolution. Revolution means you don't let regulations control you. Bitcoin had a good vision but it was flawed by not having privacy.

Some people argue that it's ok if it doesn't have privacy, we can use coinjoin and other tools built on top of Bitcoin. The problem is those tools get sanctioned and devs get prison time and anyone interacting with sanctioned tools (any privacy tool) will also be sanctioned. There are black lists, and anyone who is on that black list will not be welcomed anywhere KYC and AML is involved which is soon going to be everywhere. Any bitcoin going into those tools will become useless when they come out. Because if you are anonymous then you can't do kyc and aml and that means you can't use your bitcoin.

Bitcoin should have been a revolutionary movement which means it should have had privacy all along. Instead bitcoin became hijacked by investors and ROI and digital gold and regulations and no privacy.

Last but not least is I've noticed quite many users here on this forum have said they want bitcoin to be regulated. They don't want it to be censorship resistant. That is just a little extra to take into consideration, that this regulation hijack of bitcoin has really succeeded because not many people are actually speaking up about wanting bitcoin to be censorship resistant. Maybe it's because all those users have already since a long time seen bitcoin as a failure and moved on to Monero.

On an ending note I will add my own opinion has been just objective facts I've found during my research. My opinion is no matter how bad the situation looks like for bitcoin, we should not give up hope. We must remind everyone and teach everyone the problems bitcoin are facing so we can fix them.