The fault with the covenant was of course with the Hebrews...they couldn't continue in it because they didn't have God's indwelling spirit. The solution of course was for God to give us a spirit we can obey...he writes his laws in our hearts and minds. And yes good point, God's promises for eternal life through the new covenant have been extended to gentiles.
Actually, they are in the Old Covenant (Gen 12:3, 18:18), and the New (Gal 3:8) :In thee shall all nations be blessed."
There is no doubt that the new interpretation of the Old Covenant is the New Covenant and that the old is to be discarded (Heb 8:13)