Plenty of escrow services exist to resolve this and there are a few variation of on-chain court for dispute handling such as kleros.

The reality is very few people know they can chargeback and most use debt & instant payment option for low ticket high volume transactions.

If something was holding crypto from being used to pay for daily essentials, it is not charge back ability.

Yep this is true. I work in online escrow. It's basically the original "smart contract", and until we are able to reliably digitize purchase events it's hard to beat. I have friends who talk about smart contracts, not understanding that it's currently very difficult for a computer to recognize events like "buyer has taken possession of merchandise", whereas it's pretty easy for a human.

The dynamic is having some trusted 3rd party to manage disputes. Which defeats the point of crypto.

It's just a useful feature the fiat system has.

The bigger point of crypto is that this trust can be parametrized and made transparent in a public ledger with less intermediaries. I see it as getting to feature parity, not as something that undermines trustless-ness - don't throw the baby out with the bathwater.

What actual value does this provide the buyer or seller? All of these blockchain solutions throw out a lot of buzzwords but after over a decade, I'm still yet to see any kind of benefit being provided.