It doesn't, according to mainstream dispensationalism. And yes, they believe the world is irretrievably lost.
'Ultimate failure' is the generally held expectation for the gospel, at least by American dispensational evangelicals. Dispensational author J. Dwight Pentecost, in his 1958 book Things To Come, puts forth the popular view of dispensationalism, asserting that the church indeed progresses towards statistical impotence, i.e. is prophetically doomed to both a declining influence and a growing inward corruptness as the "church age" progresses in history....
During the course of the age there will be a decreasing response to the sowing of the seed, from a 'hundredfold' to 'sixty' to 'thirty'. Such is the course of the age....[the parable of the mustard seed] teaches that the enlarged sphere of profession has become inwardly corrupt. That is the characterization of this age....The mustard seed refers to the perversion of God's purpose in this age, while the leaven refers to a corruption of the divine agency, the Word....Modern evangelicalism's problems are only compounded by it's holding to eschatological dispensationalism. How can it expect to transform society with the Gospel, if it believes that the church will increasingly "lose it's savor" in history (allowing the world to get "worse and worse")? Do evangelicals really believe that the Blood of Christ can produce life-altering changes in converts' lives over time, capable of altering (in a statistically measurable way) the moral, political, and social landscape of this county?
[pages 146, 148, emphasis mine]
"Why polish the brass on a sinking ship?"
- Dwight L. Moody.
"Do evangelicals really believe that the Blood of Christ can produce life-altering changes in converts' lives over time, capable of altering (in a statistically measurable way) the moral, political, and social landscape of this county?"
Yes.