> Is this a problem with React itself?

React is far from the best tool for most jobs (if any), but it has a shitload of inertia.

I can highly recommend looking into Lit (used to be Polymer): https://lit.dev/docs/

IMHO it allows just the right amount of encapsulation and structure, whilst building on W3C web components and being highly interoperable with other javascript libraries/vanilla code. It's pretty much what web components should be out of the box.