Cryptocurrency is on the way being managed by govt. So it's correct to say cryptocurrency did not fail, but certainly the original libertarian vision behind it is dead.
Any currency that has any political ideology would require some form coercion to be used by those who do not share that ideology. Fiat currencies carry that coercion implicitly, people who don't like the government generally still use their money because they have little choice.
The underlying principle of Bitcoin was consensus. Agreeing to operate on whatever principles the majority of miners are using. Forks are an integral part of that, people choosing a different path and those who agree with them going that way. The perceived value coming from those who accept whichever fork they chose and what they think it should be worth.
The only real "Stick it to the man" kind of philosophy that came with it was as a rejection of unilateral monetary control. That is the antithesis of consensus.
In an ideal crypto world governments would be the majority of the miners. They would negotiate amongst each other to decide on monetary policy by consensus. That's a long way from happening, with no clear path towards that end in sight.
In a sense that too, is an ideology, the distinction is that the ideology doesn't want to do the thing that it can't. It presents an option, instead of forcing people to use it.
At best they can ask the public to please turn over their private keys, which will go about as well as efforts to stop piracy.
At one point the US gov was building their own crypto currency, and I'm sure it wasn't because they felt the existing options weren't private enough from oversight.
Stopping cryptocurrency is as hard as stopping end to end encrypted messaging or banning porn.
You either allow access to the open internet or you do not.
Well sure, but if you want to actually use it you need the whole keypair. Unless you're really good with you elliptic curve abacus you're going to need a computer for that l.