Honda is great at delivering cars that do exactly what people actually need or want.
The Element had huge interior space and was thoughtfully designed to be ultra-utilitarian. Most consumers don't actually need a gigantic 4x4 with huge ground clearance to drive to their camp site once a year, so they didn't include those things.
Honestly, the number of people who need high clearance 4x4 off-road vehicles ever is extremely small. Most people don't realize that something like the very capable Subaru Outback can actually conquer most casual offroad trails these days.
The Honda Ridgeline is another great example. It was the perfect truck for the way most people actually use a truck: mostly commuting, occasional light hauling and towing. It gets great gas mileage, has enough towing capacity to pull a side-by-side or even a car on a light trailer, and it's very thoughtfully designed. But it doesn't have the big truck look, so most people skip it. Early base models were even FWD, which is perfectly fine and reasonable for the average truck owner in warm climates, but consumers balked because nobody had ever seen a FWD truck before. (They dropped the FWD model eventually).