You are absolutely right. The great appeal of hydrogen is that you can get it straightforwardly from water and it oxidizes back to water. Hard to imagine a cleaner energy cycle, subject to the extraction energy source but that’s in common with the alternatives.

Pretty much everything else about it is bad. Shame.

Hydrogen storage becomes quite easy when you forget about H2 for a while and focus on the energy content instead. Add some other atoms into the mix and you get something much more benign with little energy loss. Methane (CH4) is the obvious first candidate because it's so close to what we are used to burn, but ammonium (NH4) is also a good "storage hydrogen" (this one you'd want to split before burning, but it's easier to make because there's far more N than C in the air). Ammonium liquefies at easily achievable -33C or at room temperature under pressures no higher than what you find in certain bicycle tires. Some are even exploring the viability of iron dust as an energy storage medium: it oxidizes quite violently and would be recycled from the resulting iron oxide dust with hydrogen.

So hydrogen electrolysis would be the root of renewable chemistry just like fossil hydrocarbon is the root of almost all current chemistry (where even processes that use hydrogen are sourcing that from fossil hydrocarbons). You can have a "hydrogen based economy" even without any meaningful amount of H2 ever stored or leaving the power-to-x plant.

Usage site H2 applications are a dead-end, that's something I would have signed ever since the "hydrogen economy" proposed by George W. Bush (funny how benign hindsight looks at him post-Trump). Admittedly, back then I was also completely unaware that "hydrogen based economy" wouldn't necessarily mean "H2 to the home", I was just shooting down that idea with basically the same inevitability arguments as yours.