I'd definitely say that Darcs failed to catch on because it didn't scale with the size of the repo, the larger your history was the more likely you were to run into performance issues, and there was little you could do about it because the underlying theory is flawed.
The scaling problem with Darcs wasn't about hosting, but in the implementation of their theory of patches and how it handled conflicts. See http://darcs.net/FAQ/ConflictsDarcs1#problems-with-conflicts for an overview of the issues in Darcs 1 and 2.
This seems to be also one of the driving forces behind the development of Pijul, which is also patch-based instead of snapshot-based, which makes it easier to understand and use, but all implementations so far had major performance issues once repositories grow.
For more on that, see https://pijul.org/faq.html
I was one of the early users of Darcs 1, back before Git existed. I wanted to use version control, but the alternatives were pretty hard to understand and use. While Darcs was really nice to use (, and fast on small repos, after a few years I had to convert everything to git because exponential times on most operations was just not sustainable, and fixing that required constant vigilance and altering history, not very friendly for new contributors.
