You sound confused.

There is a difference between doing all those things (restrictions, surveillance, censorship, etc.) to bitcoin and doing all of it to a centralized service using bitcoin.

For example they can force you to go through KYC when you use a centralized exchange and they can order that exchange to freeze your coins. But you weren't using bitcoin, you were using a centralized service.
When you use bitcoin, nobody can freeze your coins. Nobody can prevent you from sending transactions from any address to any other address (ie. censorship resistance).

When the government impose all those restrictions, that is NOT bitcoin's failure. It is the society's failure for having a government that doesn't represent their interests...