I’ve been thinking in the back of my mind for a while now, that the Yarn.social / twtxt + ActivityPub integration was a mistake and a. bad idea. I’m starting to consider it a complete failure.

I understand your thoughts on this, but I would not call it a failure - because you learned a lot from it, and lots of things worked as well.
And there are alternatives for those who needs\wants activitypub, so I think also yarn\twtxt benefits from you focusing on that instead of dealing with the frustrations of activitypub integration. And maybe it’ll feel a bit better to put that on the backburner? :)