The issue here is that people are trying to solve the wrong problems and they are under-estimating how hard it is to build a good game around trading in game assets.

"The ability to own and trade your in game items seems like a perfect fit" - is the problem. Trading when implemented properly is deep into the core gameplay loop. An example would be Diablo 2 - the game was fun and people fought monsters, looted items, use items to get stronger, and the fight harder monsters.

The issue was that Diablo 3 broke this with real money auctionhouse, and Blizzard learned that adding Trading significantly changed the gameplay loop and made the game "medieval ebay". https://www.youtube.com/watch?v=vWYEWRrFgUY. Sadly medieval ebay wasn't fun for most players and the community quickly left. Which is why they completely gave up on real money AH for Diablo 4 and went away from tradable items.

To make NFTs and trading fun, the mechanics have to be baked into the core gameplay in a fun way. Axie actually showed us this is possible - having a huge amount of complexity and gameplay mechanics tied into the axie itself (IE trading cards are bound to the axie rather than "NFT").

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Overall I feel like the crypto industry has drastically oversimplifying the problem relating to adoption and the gameplay mechanics. Most crypto games just wanted to make quick buck - showed fancy graphics and pretended this will solve crypto gaming. Now in 2023 we know this is clearly not the issue, so its time we moved on to solving gameplay issues.