As the project creator I agree. It will never supplant the Internet, but localized networks can play a huge role in how the web works however, and I see establishing these as the real goal of the project.
The problem we are definitely running into is that as a crowdsourced project, we have a lot of people who don't know what they're talking about. However, we have a small subset that do (myself not included, I'm more aiming to get the ball rolling than anything) and have been hard at work on the project. There is a lot more noise than signal right now, but that will change as a more solid technological platform for local mesh networks arises. Once we have a basic platform we will begin to address issues such as the addressing and other scaling issues.
So I guess my final point is that we ARE working on a hardware platform and then we will work to make this accessible to the average person on /r/darknetplan . There are hurdles, there are idiots, but we are working on it and I don't think it is safe to call the project failed until we've had a chance to actually try.
Here is a distinction I've been trying to make clear over the past couple of days.
While our "vision" of the absolute end goal sounds slightly more like the second, our actual goals are to produce the first. This is a much more realistic plan than our vision, and is what the project really aims to do. The vision just aims to bring everyone together about a set of issues that have been very much discussed in recent times.