Excuse the long post but given the couple of days since the result and after reading and listening to a bunch of perspectives, I think a more nuanced analysis is now possible.
What you've articulated is a fair view from the outside. I would say however that it's a bit superficial from an Indian perspective. A common mistake a lot of outsiders and even Indians make is to consciously or unconsciously treat the Indian voting public as a monolith and look for national narratives when the explanations for seismic movements like these are usually at a more local/regional level.
While on the surface, the BJP's national voteshare remained at more or less the same level, it's composition changed significantly.
As an illustration, it's voteshare in UP fell from ~50% to ~44% while it's share in Tamil Nadu went up from ~3% to ~11%.
The first loss cost it 30 seats. The second gained it no seats.
I know the likes of
@cricketjoshila and
@CricketCartoons will disagree with me but I think where BJP has failed is the non-Hindutva narrative. The Hindutva narrative is intact and will continue to win the BJP it's say 20-25% voteshare nationally in various proportions across the states - stronger in the North which takes religion more as a voting identity and weaker in the South which doesn't. In fact, it may even have strengthened a bit - I say this anecdotally...I don't have actual evidence but the family WhatsApp groups in my and my friends' Southern families show an increasing muscular Hindutva narrative openly discussed which was never the case before.
However, the failure I think has come from the dissonance between the "Booming superpower India" narrative and the ground level day-to-day job, inflation etc. issues especially in underdeveloped regions. You just have to look at the HDI and other economic indicators of the constituencies that the BJP lost in UP - strong dominated by economically backward groups like Muslims, Dalits etc.
Overall a key point I would postulate is that Indian politics is going increasingly regional. The entire opposition (including the Congress which is now even internally a collection of regional parties) is local/regional. BJP is now the only national party but needs to find a way to fight at a regional level and not just rely on the national Hindutva and "Shining India" narrative.