I mean people still use `ls` everyday so it in fact did win. We have super rich GUIs, REPLs, the start menu, live programming environments and notebooks, web browser file listing capability, the ability to build your own web app to list files visually anyway you want.
Depends on how you define "functionality". You could say that ls's functionality is "providing a text listing of files in a directory. You can't get that from a GUI, certainly not without extra steps.
Why would anyone care about that difference? If I'm reading the listing, I don't care. My eyeballs don't care if the photons came from a GUI or text in a shell. But if I'm trying to pipe the results to another program, then I care. GUIs don't pipe well.
And people like me pipe the results of ls all the time.
And yet everyone still uses `ls`.