My impression was that it was still the hardware holding things back: Everything but the latest desktop CPUs still using the older Vega architecture. And even those latest desktop CPUs are essentially PS5 chips that got binned out.
In the wider picture, gpu compute in general on PC also failed to become mainstream enough to sway consumer choices. Development experience for GPUs is still crap vs the cpu, the languages are mostly bad, there's massive sw platform fragmentation among os vendors and gpu vendors, driver bugs causing OS crashes left and right, etc.
Re your impression, yes, AMD shifted focus more toward cpu from gpu in their SoCs after a while when their initiatives failed to take off outside consoles. But it's been an ok place to be, just keeping the gpu somewhat ahead of Intel competition and getting some good successes in the cpu side.