In my sincere opinion, the only thing Linux is lacking… Is a company willing to put their weight and 100% commit to a Linux desktop offering and, well, guarantee a “just works” experience. Like Windows and OSX does.
There have been pretenders. In the early days, Mandrake/Mandriva and Lindows / Linspire. Ubuntu was the first serious candidate - for a while. Then they started to go off-track with MiR, Unity and a bunch of other side-tracked desktop experiments that, eventually, turned out not to be fruitful, and these days it just feels the momentum is dead. Valve could be this company, but while they do cool stuff I have my doubts about them doing a whole distro proper.
As for current distros, you have Arch, Fedora and Gentoo for the more advanced users enjoying bleeding-edge, Ubuntu and all it’s flavors, as well as OpenSuSE for the less tech-savy, and finally Debian, Red Hat and CentOS for the enterprise crowd wanting more glacial movements.
Ubuntu leads the pack of usable desktop offerings, but seems to be suffering from a mental illness that makes it do retarded stuff from time to time. Pretty much like my uncle. The end user experience is mediocre at best, unfortunately.
I think that the Fedora / Red Hat symbiosis has the right idea, with Fedora being the test bed of Red Hat, meaning Fedora is free to do retarded things while Red Hat picks up the best of the experiment. Unfortunately, Red Hat is not even remotely interested in providing a good desktop experience, instead focusing on their server offerings.
Which means the doors are wide open for a “Fedora+Red Hat-for-the-desktop” distro, if any company is willing to invest a billion dollars or something like that. Not holding my breath though.
If one or a couple of distros truly go mainstream, all the fragmentation will pretty much disappear. Just look to the browser market how this could work. Same with “silly” usability problems. So, yeah, the only thing I really think is lacking - is serious corporate backing willing to commit to desktop Linux.