Isn’t a bitcoin layer two such as Cashu a good solution for private transactions? (I admit to not having the deepest understanding of how Cashu works yet, still learning about it.) But in general, why can’t layer two provide privacy instead of changing how the base layer works?

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Yep. Nothing is going to pass bitcoin at this point and privacy technology can be introduced via 2 layer options ecash, cashu lightning etc There are just too many alt coin alternatives for any to gain mainstream adoption. Id wager a 100,000 sats on it that monero never goes away but never gains any substantial market share on bitcoin either. 🧡🍻👊🏻