The biggest issue is the lack of tooling and the inability to manage a shared state. We actually ended up creating new libraries like Stencil & Lit.

Custom Elements missed the mark with the problem frameworks solve. We don't necessarily need custom HTML, we needed easy way to build and manage the whole data and visual flow locally while treating the backend response as a datasource.

Nowadays, I use web components for one-off, isolated components as a replacement for iframes, but rarely for anything complex.