One thing Marvel Comics readers looked forward to seeing in The Defenders was the moment in which Iron Fist and Power Man finally met, joining forces like they did in the comics. There was a fun dynamic between the two, one that fans greatly enjoyed. It only made sense to follow it up with a guest appearance by Danny in the second season of Luke Cage. Their brief partnership here elicited a positive response from audiences, especially those who had been looking for something akin to a live-action adaptation of the pair's comic book friendship.
What Luke Cage and The Defenders show is actually a solid character, capable of bringing as much emotion and excitement to a show as any other superhero, just not on his own. Clearly, he works best as part of an ensemble. That's not as strange as it sounds, because we've superheroes in this situation before -- in the MCU, in fact.
One of the first superheroes to appear in the Marvel Cinematic Universe was the Hulk, who first appeared in The Incredible Hulk (directed by Louis Leterrier) back in 2008. The film avoided retelling the Hulk's backstory, which was a wise decision as it freed the overall plot from the weight of an origin. Unfortunately, critical response was not that great, with reviews criticizing the film for an overly long and boisterous action sequences. It was still a generally successful film but was and continues to be widely regarded as the MCU's weakest entry.
That (and the terms of the contract with Universal Studios) is a big reason why Marvel Studios has not seriously considered giving the Hulk another standalone film, instead limiting him to appearances in other films like The Avengers (directed by Joss Whedon) and Thor: Ragnarok (directed by Taika Waititi), in which he doesn't receive as much focus. It works for him. Over the course of his appearances he has become just as well-developed and exciting as any of the other superheroes in the greater MCU and because there are others to balance him, he's become that much stronger and impactful as a character.
The same kind of growth and success can happen for Danny Rand if he were given the chance to play as vital a role in another show; there would be none of the pressure that comes with carrying a standalone series, which means less filler and unnecessary action to keep the drama flowing in Rand's story.
Other characters have developed along similar paths -- that is to say, playing a significant part in the story of another hero while developing into a fan-favorite in their own right, like Misty Knight (Simone Missick) or Frank Castle (Jon Bernthal). The former is one fans have been clamoring to see co-head a series alongside Colleen Wing, while the latter received his own series after playing a large role in the second season of Daredevil. Bt even before that, he was a thoroughly explored character who could hold his own against the main protagonist in the spotlight. Iron Fist can be just as great if he can do that, and the loss of his show will undoubtedly give the character that chance.
The cancellation of Iron Fist might benefit the Marvel Netflix shows in more ways than simply freeing up a superhero. The second season of left a lot to be explored, like the search for Orson Randall or the story of Typhoid Mary. There's no reason why those can't be explored in other shows, especially if fans are given the Daughters of the Dragon series they've been begging for. What we're saying is that even though the show is gone, Danny Rand and all the elements that made the show as great as it was in its final few episodes can still make the MCU that much richer if they just use him correctly. It's fitting, because if you think about it, it's a bit like transferring the power of the Iron Fist itself.