For real, you can not force people to spend their Bitcoin when they don't want to and I don't think that government regulation is the only reason why people are not spending their Bitcoin in daily purchase of various need, I think the main reason is value appreciation, with the high inflation rate and devaluation of fiat money, people are transferring their money into a good asset which will not be affected by inflation and that's one big reason why people are holding their Bitcoin instead of using it for payment.
Bitcoin is decentralized, can still be used for p2p payment when both parties agrees, so Satoshi wouldn't be disappointed that people are holding Bitcoin, P2P transaction was not the only purpose of Bitcoin. One of the reasons for Bitcoin is so that individuals can have control of their money, so when you have a large percent of your money in Bitcoin, you are in total control of it, you don't need the bank to spend your money.
I agree with you on the part about why people are more into holding their bitcoins instead of spending them, because regardless of the taxes or fees, people nowadays want to make money, and if Bitcoin can allow them to do that since it has a volatile value, then they are not going to miss that opportunity. Bitcoin is not the only asset that has become a store of value or an investment asset, Gold was also once used as a exchange of value or a payment method in ancient times, but nowadays, it is only used either as a store of value or an investment asset apart from it being used for jewelry and such.
When it comes to Satoshi and his purpose behind creating Bitcoin, I think he didn't create Bitcoin to actually become a payment method which people can use to make purchases or pay for their goods and services they are purchasing, but he wanted to give them a system where they can send money to one another without any involvement of a third-party monitoring or controlling everything, which means that if you and I have a deal, we can use Bitcoin for the payment and there will be no risk of us getting inquired for our spendings, etc.