Actually, most EU countries have identity cards, these cards are used for everything from your drivers license to international travel (Within the Union) they've all got certs on them, and they're provided by the government. Most people carry them to buy alcohol / enter clubs (Proof of age) or as a proof of ID when buying mobile phones or other high value items to reduce fraud. So in countries like Belgium and the Netherlands where I'd suggest high 90s in regards to % of people carrying them, I wouldn't call that "Didn't see any uptake"
The CAC is used for everything from computer access to opening doors, so, as an identification card to prove who someone is, I can completely understand from a security perspective why it would be a compulsory for someone to carry it when wandering around a military complex. I wouldn't call that dire, I'd call that common sense.
If there was more usage of these by private corporations, then I think their uptake would hit 100% as there's a day to day requirement to have them. It's just never been financially worthwhile to use someone else's technology when fraud is so low, the banks would rather pay for it, so that they controlled it, as it's their risk. The US is finally ditching mag stripe for Chip and Pin because they can push the fraud back on the consumer as it's now a much more secure device as fraud was becoming that much of a problem.
Most companies push out other things like the Vasco DigiPass products and other devices that the users interact with and enter codes through their keyboard as a second factor as NFC readers and USB ports aren't guaranteed to be available. That's where the problem comes in, in regards to the security / usability argument, the problem is usability.
Now, if the government actually made their certs more accessible and easier to integrate with, and acquiring a card / cert came with as much security as acquiring a drivers license / passport; banks and other web sites *would* start using them as identification devices for users, the problem here again is usability. At that point, white listing device IDs and USB ports / NFC chips in keyboards (More likely as no contact wear) would become a norm.
The process for replacement and what happens when you lose it though is just another thing that's not been tackled. This was part of the whole process thing that had to be tackled by the DOD, it was the process side, and getting people *used* to using the devices which was the problem, not the technical PKI implementation.