It seems like most of the failure has come from this combination:
Publicized U.S. Funding of Iranian CSOs + Administration Sabre-Rattling + Absence of External Oppressor = Tehran Crackdown on CSOs
I occasionally give Cold War-era FSO and USIA types a hard time, because some seem to reflexively reach for a toolkit that contains some combination of Voice of America programming and touring American musical groups as our front line of public diplomacy; but in this case, it would be nice to head back to a Cold War model that looked something like this:
Highly Covert Funding + Steady But Judicious U.S. Talk About Democratic Futures + External Oppressor + Patience = End of USSR
Maybe it's time to redouble U.S. efforts in Afghanistan, where the Taliban are at least externally inspired and supported—and get out of Iraq, where we are the external oppressor of some large fraction of the population.