Well, it's hardly a major blow. The Biden plan was enacted due to pressure from the GOP. He now says to the right of centre voters that he did his best, but the judge over ruled him and he's going to appeal it.
Re: "Major blow" - CNN writes shit headlines for clicks pretty often. Nothing shocking there.
But Biden's immigration policy has been pretty terrible. He pretty clearly doesn't think it is worth spending political capital on, since he won't get credit for anything anyway.
Your "he tried, but the judge overruled him" is irrelevant to most people. The narrative will be "it is an open border" no matter what he does, and cracking down hard using tools Trump used just pisses off a lot of his base (with good reason).
It's just not a focus of his administration, from all indications. The policy has mostly just been managed in response to the ebbs and flows of numbers and press coverage and there has been no vision other than "keep it mostly under control". His focus has been jobs and infrastructure and foreign policy and just doesn't seem to care about immigration much. Probably the part of his Administration that has failed to surpass expectations the most, maybe even being worse than I hoped.