Small-cap stocks are a distinct asset class. They are riskier than large-cap stocks, and because risk and return are related, they have higher expected returns. Dimensional's first nine years were poor, but that was a period of extreme small-cap underperformance, not a broken thesis.
Since Dimensional started about 45 years ago, one dollar put in the S&P 500 became worth over $100, while gold went from about $800 to roughly $4,400, only a fivefold gain. Long-term equity compounding massively beat gold, so gold-focused investors missed the bigger market return.