Wavelets were a great idea... except AFAIK we never figured out fast algorithms or hardware implementations to optimize processing them, the way we did with Fourier Transform and the FFT algorithm and IDCT blocks.

A lifting implementation of a wavelet is pretty low complexity, iirc the CDF 9/7 used in JPEG2000 was effectively a 5-tap filter. Implementation-wise, the biggest issue is that approximately no one bothered optimizing their memory access patters for CPU caches with anywhere near the same attention FFTs got. Then unlike block-based codecs, you basically need to store 16-bit coefficients for an entire frame for 8-bit pixels, instead of per-block.

But ultimately, DCTs make it way cheaper to encode similar but wrong details, where in wavelets details are effectively repeated across multiple highpass bands so the only cheap option is to not code detail.

So bad its still industry standard in Cinema quality video codecs? Like the obfuscated jpeg2000 in RED codec.

Who says they know what they're doing?

DCI (how movies are sent to theaters) does use JPEG2000, but I think they just wanted something with 12-bit video and that's pretty rare in any codec.

One advantage is if you want to decode the same picture at lower resolutions; JPEG can do this equivalent to nearest-neighbor, wavelets can do it equivalent to a better filter than that. But still not as good as just decoding and resizing down.