My 2 cents:

Steem was designed as a concept by very imaginative people who, despite being flawed, also understood something about psychology and marketing - at least enough to take Steem to the #3 crypto in the world with a market cap of $2B+. It was essentially the same core system as Hive.. So what changed?

Obviously the markets changed and the fork happened, but ultimately the technology has really only improved since then - albeit at a slow pace.

From my pov one of the important things that changed is the philosophy of key stakeholders. There is a mishmash of perspectives among the key stakeholders from what I can see, which doesn't really allow the kind of directed action that is possible with a motivated corporation directing things. Obviously Steemit inc. sucked in some profound ways, but at the same time they obviously did something right. Imo they understood the philosophy behind the spirit of decentralisation and cryptocurrency - in fact they helped to shape it... but that has been almost totally lost on Hive and has been replaced by people who even have the balls to ridicule the base foundation of how/why the technology was created in the first place.

The FIRST thing that must be done when seeking to grow a project is to gauge market sentiment and apply the scientific method to building a concrete understanding of the specifics of what people think about the project and why they aren't using it yet. It's not enough to just have some anecdotes, it needs to be professionally done. Surveys, analysis, reporting, analytics etc.

From this we can then better understand the pain points of potential users, why they aren't here and what needs to change to get them here. We all have our ideas, but it is possible to go beyond opinion through proper research - which as never been done afaik.

Once this is established there can be a better focus for projects that get funded from the DHF, in fact there should be projects proposed by stakeholders (not by developers) and then the developers can tender/bid for the work. So we identify the work that's needed, put offers out and pay from the DHF. This way it could even be completed by hiring external devs, like Steemit did.

I can definitely see a world where L2 solves some of the problems on Hive but ultimately the network needs more motivated and talented technical people to work together and make new stuff work. This also happens organically as new users come - so there are actually numerous ways to hit the ignition on this process.. we just don't have anything that I know about at the moment that is working on solving this in a tangible way... and instead of fixing the obvious issues in a systematic way, people are unimaginatively seeking to destroy the primary unique selling point that.. you know... built a $2B market cap.