Your impression is pretty much correct, I believe the main issue is that Chiang and the KMT didn't really offer anything to anyone beyond unifying China and being anti-communist.

There was some industrialization and progress made in cities, but social services and welfare such as education and healthcare were woefully underfunded ("The Director of Health in Nanking blamed 50 per cent of the country’s deaths on bad sanitation. There were 30,000 hospital beds, 5,000 registered doctors and 1,700 nurses for 450 million people.") and 80% of China's revenue went to paying its military and debts. One of Chiang's major issues was money and it hampered many of his projects, these money issues were due to famines, the afformentioned military and debt expenditure, and the fact that the KMT only controlled around 5 provinces of China, the rest were still governed by warlords who claimed to be loyal to Chinag but withheld revenue owed to the capital and engaged in criminal activities. As Fenby puts it Chiang cast his tent too wide but at the same time those alliances with warlords which proved so difficult in peace time helped Chiang unify China in the first place.

But back to what I said earlier - the KMT proved unable to offer anything substantial to its citizens. Chiang was a military officer, not a politician or ideologue and found it difficult to create an ideology for China. While he wanted an industrial, modern China he also greatly admired Confucianism and its scholars and strove for a traditional conservative China. Businessmen and merchants were profiteers and not to be trusted, and Chiang made every effort to extract as much tax from them as possible and refused to support businesses, believing more in a state ran industrialization program (which he couldn't afford). At the same time he refused attempts at worker reforms or land reform even when some in the KMT pushed for it because it was seen as socialist which Chiang vehemently opposed and he was supported by landowners.

The KMT had little contact with rural China, and mostly concerned itself with China's cities but the vast, vast majority of Chinese people lived in rural communities which saw no benefit from KMT rule. Chiang's offering for a new China was the New Life Movement - which instructed Chinese to "wear their hats straight" "not spit" and "go to bed early". it was a program of austerity and prudence (aided by state censorship and a secret police force) which was at odds with the KMT's city-dwelling base and didn't address the myriad issues rural peasants were dealing with, and most rural Chinese were illiterate anyway and so didn't know much about the movement. Another issue was KMT soldiers' behaviour. If you lived near a warzone chances are the KMT would press young men into forced military service, demand additional taxes, force you to perform labour for them, or demand supplies, while not actually protecting you from whatever bandits or partisans were also in the area. (note: this wasn't true for earlier battles and the Northern Expedition, troops trained by Chiang at Whampoa were noted for their discipline, but this collapsed after the KMT expanded their army significantly and incorporated warlord troops).

But by winter 1936 the KMT were pushing a weak Communist army when Chiang was kidnapped and agreed to instead focus on the Japanese, leaving a vulnerable Communist movement time to rebuild its forces. Chiang could have still managed to defeat the Communists.

So I think the problems were both Chiang's and also due to a difficult situation. Chiang needed to unify China and in doing so he had to align himself with warlords and criminals who would then hampered his ability to govern. But Chiang's lack of a clear vision for how to improve China and the lives of his citizens, and reach rural communities meant that he was never able to win lasting public support for himself or his party.

What won China for Chiang was the KMT's army being better trained, more disciplined, better equipped and partially led by Westerners who aided Chinese generals. Perhaps after the Northern Expedition he could have turned around and used this army to properly take control of the states his warlord allies still ran which would have allowed Chiang to raise more revenue and perhaps properly fund his industrialisation plans, but then that's turning into "what if" territory, and I'm not sure we can know what would have happened. I believe someone more politically skilled could have probably established a more effective government, defeated the Communists and established a KMT unified China, but Chiang was facing a very difficult situation.

Source: Jonathan Fenby - Generalissimo: Chiang Kai-shek and the China He Lost