Whether desktop linux has been successful or not must be judged by its goal.
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.
Even for the mass market goal, I'm not sure it's failed. All my family and friends (including my parents) are running Ubuntu, and whenever my (average, when it comes to computer literacy) girlfriend hears about someone having problem with Windows, she says "well, it's their fault for not running Ubuntu".
The FOSS community doesn't really have a single goal. Some people want a usable free desktop, others to get mass market share (see Ubuntu bug #1, for example). Some people have specific principles - like that science should run on open source code - others see money to be made from it.
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.
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.