Pseudonymous addresses and no address re-use is cool, but it's clearly not good enough for real privacy.
Pseudonymity is superior because it gives the user the choice of radical transparency or anonymity. This is a good thing as I want the charities I donate to, to be radically transparent and not automatically perform stealth address functions with conjoin/coin shuffle.
Was it above his abilities? Doubtful.
Believe it or not, Satoshi was human and made plenty of mistakes.