From what I understand and have read so far, the design approach taken by GTRE was sound enough, and as good as was available in the 80s (when Kaveri development studies were started).
Problem lies in high temperature materials and alloys, esp. in hot sections of turbine afterburner. The basic engine itself is ok, and has almost reached design specification (I think Spec was frozen at 55KN was "dry thrust" w/o Afterburner, and 85KN "wet", i.e. with afterburner. We achieved 54KN and 81KN , or around those ranges).
Main points are:
1. We need an alloy to withstand 1700 deg F of temperature (this is for blade material)
2. LCA had "design creep" issues, so weight goals changed, and even 85KN wont be adequate in future to power LCA to desired level. Hence, an imported interim engine was selected, and Kaveri de-linked from LCA programme.
3. The hope lies here, if we can achieve 85KN and 1700 deg. temperature, it opens doors for us to make (speculation!) more advanced versions with higher thrust, which can fly on LCA.
4. Basic engine itself sound, and many people have called for use of non-afterburning Kaveri on UAVs,etc.