I find it strange that people keep promoting that YouTube documentary. Ignoring tone issues, there is a lot of cherry picking and other logical fallacies. For example, he talks about how terrible Tether is and then completely ignores USDC. He also claims that none of the popular blockchains can scale, but Solana is frequently in the top 5 most popular cryptocurrencies.
It seems to me that people that do an hour of research are polarized hard. Either love it or hate it. The more time you spend understanding the space the more nuanced it becomes. Many are using the technology to facilitate scams and overpromising, but that doesn't make the technology fundamentally useless or bad.
My bad, I assumed we were already talking about on chain games. I agree that on chain loot drops are more difficult to implement than the traditional way. We'll have to see how much gamers in the future care about their items being NFTs or not.
I don't think you're missing a ton. Getting game developer buy in is definitely the biggest challenge.
I think "GameFi" is the most compelling use case. Use your in-game items (NFTs) as collateral for a loan, or lend it to other players to use while you retain ownership. Game devs could build all this functionality themselves, but they get it for free if they don't take the walled garden approach.