The problem was that things started breaking at scale under the gold standard. The great depression happened under the gold standard, and financial institutions had no ability to do anything to fix the mass hysteria.
Yes, the house as an investment vehicle rather than a house is a problem, but it's not because of fiat currency per se. The population density increasing under a capitalistic system pretty much guarantees that housing becomes a speculative asset regardless of the specifics of the currency system.
Meanwhile BTC has been wildly unpredictable and when it's at its most hyped, massively deflationary which is also a terrible thing.