Carbon fiber is actually a pretty good material for submarine type loads. Submarines have to balance their need for an extremely strong hull with the need for buoyancy. For a given size, to make your hull stronger, you must make your walls thicker, which makes you heavier. The only options are to make the sub bigger, increasing the internal volume, or making the hull out of something with a better strength to weight ratio, or more accurately a better strength to specific gravity ratio.
In carbon fiber composite, it's actually the epoxy which provides the compressive strength, and while it has very good compressive strength, the real advantage is its very low density. It is only just barely denser than water, so you can make your hull extremely thick with essentially no loss in buoyancy. Carbon fiber does fail catastrophically, but they could have just made the hull so thick that they were never getting anywhere near the failure point. Further, since carbon fiber is built up in plied layers, you don't have the same sorts of processing limits as with thick metal plates.
The basic concept of Titan was sound, it was just horribly horribly executed. With their flagrant violation of basic engineering and safety practices, they would have killed people no matter what they made their sub out of.