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 most people are just responding to the incentives re what the market appears to be valuing today. Plus imo there is no "business model playbook" for apps today, whereas it comes baked into the L1s and is "just a matter of marketing"

apps are "hard" because you have to create a new product with new demand and a new business model. L1s are "easy" bc the demand and business model are ~proven, you just have to ~siphon off usage from elsewhere

it's not so different to people generating the Nth uniswap competitor rather than try to figure out what hasn't been built yet that is still needed

used quotations bc ofc the reverse is kind of true. Being hard means hard in the short term with more green space & opportunity in the long term and if you figure it out you're in a very good position. With L1s, blockspace is ~non-fungible and you can expect fierce competition in a race to the bottom for most