It was so damn successful on that goal that at some point (early 2000's) we thought we could reach world domination without any heavy investment.
I have a very functional, good looking, modern 'free' desktop.
Disclaimer: Im a KDE contributor.
Linux has been my free as in speech OS for many years. I love it! I don't give a shit about the "Desktop". Sorry, KDE contributor, KDE is a very impressive product, I just don't need it. The command line is how I use Linux, because it is a far better way to deal with a computer. If you are a power user.
Linux, from, by, and for, power users has always worked spectacularly well using the command line.
The desktop? That's always been something our pride and ambition wanted, but we never needed it.
Are you telling me that you use none of them and perform all your tasks without even running X?
Email does not need window managers, same with music players, chat service, emacs is my "office suite", etc. All of these are generic things for a wide public. For everyone. But OSX and Windows are already doing a great service for everyone.
Why should the free and open OS also be easy to use for the general audience? What's so wrong about it being specialized to power users?
My point is that Linux as an OS for and by hackers has been spectacularly successful. As an OS for everyone else? Meh.
Ubuntu has so far lead the charge with the Linux desktop and even back in 2005 the user experience was atrocious (no fault of their own).
The open source community should've just given up and transferred resources to FireFox, servers and the Linux kernel - because so far net investment in desktop Linux has had negative ROI.
Just look at the example of Plan9 to see why.
Its goal was not reaching mass market (hence, its not a company selling a product). Its goal was creating a usable free desktop. We have more than one usable desktop. We have been successful by definition.
But the fact that you say "we should've just given up" or "Desktop linux was always completely stupid idea" tells me that you do not share the concern of people who are working (mostly as volunteers) on desktop linux.
These groups work together when their interests are aligned. Many people, for instance, have an interest in ensuring the Linux kernel works well. But the goal, and hence our success, depends on the individual.
It released me from dependency hell, forced me to learn VIM, and vastly improved the quality of my Google searches when I had a development question.
As a result, I'm a much better developer today than if I had been able to afford a Mac.
Specific distro's might have mainstreaming the Linux desktop as a goal. Some might have failed. Some are still trying.
But there's no single goal here. Nor even a single vision of what a "Linux desktop" should look like.
However - Linux dominates mobile and it dominates commodity consumer tech. It already dominates back end server tech. My Android phone/tablet is indistinguishable from the iPhone/iPad. The forcing function for this was due to manufacturers needing an OS to run their mobile systems - since Apple ain't licensing - they are forced to adopt Android to scale out their high volume production.
Linux dominates server tech because licensing fees kill business models and the vast majority of backend processing is mostly stable and needs to be horizontally scalable.
The world is going to run on linux. And it'll be through the browser.