I used to think it wouldn't scale cause there is transaction fee, but BCH proved me wrong. I think it's because it gets exponentially more expensive the more it's used /1
As @discerningLikes said. Ethereum is too complex to scale. Maybe it can in the future, but not currently. Miners can't raise gas limit because of too many orphans resulting from it.
That's also true but if you raise the block time you will just need to have more transactions which result the same. I think it's the validation that's too slow and is the bottleneck.