To expand on this, to receive money over Lightning, you need someone else to lock up their bitcoins for you. This is called inbound liquidity, and the problem of users getting inbound liquidity is no joke. Lightning Labs recently launched Lightning Pool to help with this, but fees range from 5% to 25%. Uncompetitive. If you think about it too, it makes sense, because anyone locking up their bitcoins for others should expect a several % return, or else they would loan it out at similar rates. Current Lightning wallets are basically giving their users inbound liquidity for free using VC funds, but is this honestly sustainable? There are other problems with Lightning, like the requirement to be online to receive payments, watchtowers, UX complexity of channels. Some of these are solvable through centralization. But that is why you'll hear people say Lightning recreate the banking model, because realistically that looks like the only way it could work. Oddly, this was all pointed out by many people over the years, but Lightning seems to get endless forgiveness in its inability to deliver, because it is BTC's only hope to maintain the peer-to-peer cash narrative.

The looking up of liquidity is the whole reason LN can not scale or be cheap ever.

Today people in crypto may be willing to look up bitcoins they hold long term anyway. But in the real world this would be dead and trapped capital it doesn't work for you and you cant even use it to quickly buy something an take advantage of a market situation.

The only reason why someone would look up capital like that if is it makes money. So people who use someone else locked up bitcoins have to pay. This makes LN impossible to be cheap. You literally lend money to send money to someone. Its complete absurd. And as you said to make this more efficient large centralized pools are created so there will be a monopoly or oligopoly for lending, hows that gonna be good for the fees.

LN was dead before they started coding it.

If I decide I want to be long BTC, why not also lock it up to earn fees?

No one questions that the people who are bullish on BTC are in on it (some). The question is why would I pay you to lend me BTC when I actually want to send my BTC to someone. It literally adds a third party in what should be a p2p transaction. They replaced the "evil third parties" called banks with their own liquidity pool.

Funny how they figured out that you cant make money with money services if you remove the third party, so they added it back in.

On top of that there are countless other blockchains/DLT that have cheap transactions on the first layer. Cheap as in fractions of a cent. To compete with that you would need to lock your BTC for free but then you still have the on chain transaction that LN needs sometimes that cost way too much.

lock up*