I was recently stuck on the tarmac for nearly 3 hours over night. It was an awful experience (especially since they were unable to give us a real estimate, we kept hearing 15-30 mins for the entire duration). I would have much rather they simply cancel the flight than have to go through that.

The issue is that all these airlines are running things with much lower tolerance for variance in the system than they used to. They just don't have the resources to support that any more. Rather than lose money by being honest about what they can handle, they'll let passengers suffer. The reason is obvious: no matter how awful my experience so far, I'll continue to keep flying.

I suspect air travel will get worse until the limit case that it's so awful people start refusing to fly altogether.

Exactly. The problem will be solved.

A route that regularly has multi hour delays on the tarmac due to congestion at terminal should not exist.

If the service is being offered it better be capable of being rendered.