I highly respect the Ken Thompson and the rest of the old UNIX hands, but wouldn't they admit that the real world is messy and the best solutions in isolation don't always win?
Their creation C and UNIX won over the more advanced LISP and Smalltalk systems because they were simpler to implement. Even their own more advanced Plan 9 based OSs could not displace the more widespread unix-like systems.
It seems distribution and 'good enough' to rely on always wins. IMO, dynamic languages like Perl, Python, Ruby, JavaScript, PHP and the heavily marketed Java provided good enough high level facilities that have prevented people from reaching for Lisp and Smalltalk.
Looking at it through this lens, perhaps C++ was the vehicle for strapping some high level facilities on a widely adopted low level performant language that made it just good enough of a technology for wide adoption.
You think that LISP and Smalltalk aren't widely used is because they weren't easy to implement in the late 1980's? There have been many languages that have risen to prominence in the 40 years since, yet LISP and Smalltalk remain niche languages.
Which new languages have risen to prominence outside of a niche?
My opinion is that Lisp and Smalltalk are too pure and abstract. C is heavily tied to the real world of computing and can be easier to grasp for beginner. But try to explain variable bindings (instead of assignment) or message passing (instead of function calls) to a beginner in programming. It’s not that they’re hard to explain or understand, they’re just hard to be completely grasped without a foundation in computer science. They’re too alien.