There was nothing wrong with the Old Covenant, except that the Hebrews interpreted it in an imperfect way. Through Judaism, the God of Abraham would have remained known only to the Jews.
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.