NFTs are dead because of a critical technical mistake made when the standards were proposed. Most of the developers of these tokens relied on royalties from trading of these tokens (5-10% off every trade). However, once a loophole was found traders (and exchanges) could bypass the royalties payment and keep the full sale amount to themselves.
The ERC-721 smart contract standard added royalties as a suggested field (not mandatory) for the exchange executing the trade. This meant the NFT devs were at the mercy of the trading exchanges (Blur, OpenSea etc.) to pay out the revenue. As the market turned and revenues dwindled, the exchanges decided to stop paying the creators royalties while keeping a marketplace fee for each transaction!
Those who understood how these contracts worked onchain understood the mechanics and could bypass any fees by simply wrapping the NFT into a contract, transferring the wrapped contract to someone who can then unwrap and become the new owner.
We are now in a wrap or be wrapped world
Any rules or policies applied can be bypassed simply by wrapping the token. Teams like LimitBreak are doing great work with their latest smart contract around royalty and rules enforcement but that also requires a lot of engineering talent for teams to use it. If you want to build a business in web3, you cannot afford to have your tokens be wrapped.