Not solving the problem of high transaction fees is bad for Ethereum's reputation. Ethereum will continue to be used, of course, but only users with larger amounts of funds will use it, as transaction fees don't matter to them. In fact, if we look at the last 500 tokens added in Coin market Cap or Coingecko we can see that only between 10% and 15% have been created in the Ethereum chain, the rest use cheaper and faster chains.