I think a more fundamental problem is a large portion of content production is now either unindexable or difficult to index - Facebook, Instagram, Discord, and YouTube to name a few. Pre-Facebook the bulk of new content was indexable.
YouTube is relatively open, but the content and contexts of what is being produced is difficult to extract, if, for the only reason that people talk differently than they write. That doesn’t mean, in my opinion, that the quality of a YouTube video is lower than what would have been written in a blog post 15 years ago, but it makes it much more difficult to extract snippets of knowledge.
Ad monetization has created a lot of noise too, but I’m not sure without it, there would be less noise. Rather it’s a profit motive issue. Many, many searches I just go straight to Wikipedia and wouldn’t for a moment consider using Google for.
Frankly I think the discussion here is way better than the pretty mediocre to terrible “case study” that was posted.
This is problematic when entire categories of sites were basically left out of the running, since the directory had no way to categorise them. I had that problem with a site about a video game system the directory hadn't added yet, and I suspect others would have it for say, a site about a newer TV show/film or a new JavaScript framework.
You've also got the increase in resources needed (you need tons of staff for effective curation), and the issues with potential corruption to deal with (another thing which significantly effected the ODP's usefulness in its later years).