Head of line blocking in http/2, and performance/reliability on dodgy mobile connections. It's definitely getting to the point of diminishing returns, but given how widely http is used it does seem to justify the effort.
TCP HOLB is hardly diminishing returns; it’s the defining way in which HTTP/2 is not uniformly superior to HTTP/1.1—because of it, for a meaningful fraction of users, single-connection HTTP/2 behaves visibly worse than its primary competition, up-to-six-connection HTTP/1.1. (Lack of WebSockets support used to be another point, but that got fixed a year or two back.)
Some of the other benefits of HTTP/3 over HTTP/2, like the bypassing of TCP’s outmoded congestion control, are definitely more like diminishing returns.
HTTP2 always seemed like a great idea for the backend and a "meh" idea for the front end. On backend systems where networks and lines are mostly reliable and fast, HOLB is generally not a problem.
It's only when you start talking about connections outside a backend network that HTTP2's weaknesses start to show (specifically mobile networks).
I wouldn’t call it “meh”. For almost all sites, it’s at least a slight win for the significant majority of users; for most sites, it’s a moderately significant improvement for most users; for some sites, it’s a huge improvement for most users. Certainly high-latency, high-loss networks undermine its benefits, but it’s still generally a definite improvement over HTTP/1.1.
Some of the other benefits of HTTP/3 over HTTP/2, like the bypassing of TCP’s outmoded congestion control, are definitely more like diminishing returns.