You forgot the #1 reason why it failed... Ignoring that it was hidden from view:

Room cap.

Pretty silly eh? It worked on some levels, it found another person who was using it, made a room, dumped them in together.
But there's a limit on how many user rooms there can be, and when that's hit trying to make a room gives a stupid "not connected" message. Gave people the idea that MM was completely broken at the time (as opposed to it being cack and kinda pointless).

Really it should be left until after the whole ranking thing & mods blah blah are all sorted out. Adding more on the pile to sort in one go never works here, so rather than a massive unstable turd go one step at a time & work towards something that actually works.

As for mods, I'd rather there were more than just 3. A low number is pretty silly, and I'm sure there's room for people to agree that a couple or few or each type are valid. Aikido being a good example since it's a pretty fragmented mode, pretty sure the striking mod players will have arguments for one over the other too.