Current non-spam demand for blockspace is probably 1% of the available supply across all L1s and L2s, yet the crypto world is still obsessed with L1s and L2s. Why is there not a massive push towards applications to fill said blockspace? Please make me understand why I'm wrong and what I'm missing?

I think you've been answering this question well in your articles. Crypto-apps are only better in the realms of:
- identity
- money

We're using an app that is showcasing the first, and apps for the second have PMF (the future is here, it's just unevenly distributed...)