We study a one-dimensional disordered quantum fluid with linearly confining interactions (disordered Schwinger model) using bosonization and the nonperturbative functional renormalization group. We find that the long-range interactions make the Anderson insulator (or, for bosons, the Bose-glass) fixed point (corresponding to a compressible state with a gapless optical conductivity) unstable, even if the latter may control the flow at intermediate energy scales. The stable fixed point describes an incompressible ground state with a gapped optical conductivity similar to a Mott insulator. These results disagree with the Gaussian variational method that predicts a Mott glass, namely a state with vanishing compressibility but a gapless optical conductivity.