Yeah, it is practically true that AGPL means a project is impossible to use for a lot of people, but that doesn't have much to do with the license itself. A lot of developers work for companies that have legal departments that would rather err on the side of caution with copyleft stuff. But of course a lot of companies love GPL code nowadays. After all, the GPL allows them to exploit the loophole closed by the Affero clause, especially in the case of web services companies. From a corporate perspective, free software is good, but it's only great when you don't have to follow it, because then you effectively get to crowdsource some of your development costs without any reciprocal obligations.

The result is that a lot of developers have had to sign contracts with their employers that say they'll never use or contribute to AGPL code even in their personal time. This is often reinforced by mandatory compliance training that repeats bogus nonsense about how if you ever run an AGPL program on your personal laptop you could turn the entire company codebase into GPL code. These myths then proliferate and end up driving other companies to do the same thing. It's all FUD of course, whether the people repeating it know that or not, but the practical consequences are that a lot of people legally cannot interact with AGPL projects at all. Again, that's not because the license is all that restrictive but because of what amounts to a universal corporate boycott.