No, we aren't, there's still so so many more!
- Even if you use the kernel switch you can still ptrace an application on startup, do you read the code for every .desktop composing your launchers?
- You can trivial add say, a modified web browser or terminal emulator to a user's PATH.
- You can add aliases to a user's shell configuration
- You can change a user's entire shell to a shim designed to fool them into thinking things are normal
- You can replace that desktop update notifier with a tweaked one that logs that root password first
- Wayland too will fall when you replace a user's compositor with a customized one, must of Wayland's security improvements have actually just been moving things from display server to compositor. Simply re-configuring the user's session choice will likely be enough to do this. Just like changing your shell.
- The PolKit "hole plugging" you suggest only works if there's no way to recreate a dialog which would look exactly the same, so I'm not sure how it has any relevance here
- SELinux more prevents problems between user accounts, as the isolation is designed to work, not within them and not for authorized escalation tools like sudo
- In the case of desktop systems it's also important to remember that most if not all of the important data will be in the user's home directory. https://xkcd.com/1200/
This will not be possible, as long as the same user controls their own configurations for core stuff like shell and launchers. User accounts weren't designed for this level of isolation. Make a separate user if that's what you want. This is why most distros run all servers under different user accounts out of the box. If you're concerned about the security of say, your browser, you should probably consider adding user account isolation to it too, on Android every single app gets it's own account.
If your threat model involves giving untrusted users access to a sudoer, you're not going to have a good time. User accounts are still the primary form of isolation on Linux, it's not a sandboxed mobile OS, maybe Flatpak will change that someday, but for now we have barely even started on this sort of switch to an entirely different security model.