The fundamental problem with this is that it tries to solve an epistemological difficulty by changing our ontology. (N.b. philosophical zombies are an epistemological challenge: you can postulate that they have no consciousness, but you can't observe it because by construction their actions are identical to conscious equivalents.)

Inasmuch as it solves the problem, panpsychism fails to provide any evidence or even anything that could count as evidence. Because, after all, if you could solve the epistemological problem you would just do it: ta-da! Evidence!

We are pretty content, now, that there is no vital force, just mechanism, behind being alive. We achieved this understanding by painstakingly dissecting the mechanisms behind life until we realized that the collection of mechanisms seemed fully up to the task of everything that life was supposed to be.

We're not as far along with consciousness at least because the tools we have to interrogate the fundamentals of the operation of the mind are extremely limited compared to the complexity of the mind's operation. (If we had adequate tools, it still might turn out to be inscrutable given our capabilities to understand things.) But there is no reason to believe that it couldn't just be a certain type of computation implemented with matter. "There does not exist a computation that gives the computational entity privileged access to high-level representations of its own internal state" seems clearly wrong; but without something like that being necessarily wrong we can't tell whether or not consciousness is of that sort, because we really don't understand our own operation at a vastly greater level of detail than that.

Now, I agree that Dennett did not always have the best thought-through explanations for this. Pat Churchland is the clearer thinker, I think, in this matter. But this doesn't mean that panpsychism is right, just that not all arguments against it are right. Formulating an inadequate argument is not much indication of anything!

Because it is extremely clear that material things exist, and there is no particular reason to believe that material things cannot implement consciousness, and because panpsychism has no evidential support, one should not accord it much likelihood of being true. Those people who like the idea should of course explore it in a rigorous fashion, because weirder things have turned out to be true (e.g. QM--and, no, there's no support for panpsychism there, though there's plenty of room for compatibility). But so far, there is absolutely nothing of note. So it's absurdly premature to say that materialism looks increasingly shaky. There isn't any evidence against it! The only "evidence" is that there are some things that we don't know how to explain and shouldn't expect to be able to explain given our level of knowledge.

The challenge panpsychism has is to distinguish itself from the computational capacity of matter. So far, it seems absurdly far from being able to do this: there are no demonstrated phenomena corresponding to fundamental units of consciousness / experience, and therefore people still have to figure out how to even get started with panpsychism as a serious inquiry into how mind works.

Panpsychism (maybe) solves one philosophical problem at the cost of introducing an apparently much harder evidential problem: that of binding. We have experience "because", in some sense, we are comprised of things that have an experience. But experience goes with us, not our molecules. And we don't have experience (mostly), at least not one we can access later, when we're asleep. Or if we take benzodiazapines. Or get hit too hard. Or have a stroke. But if we lose an arm, have locked-in syndrome, etc., then no problem--experience stays! There's some sort of incredibly finicky binding going on between the fundamental experiential components and the experience of a whole person which would be a monumental task to figure out even with good experimental techniques, except we have no experimental techniques to speak of (save to ask people if they experienced something, and even that isn't very good because it conflates awareness and memory).

So, one shouldn't hold one's breath. Those who think it's a cool idea can try to explore it; the rest of us should wait for them to get anywhere at all.