Technology

XMPP doesn’t have encryption integrated. There were a few attempts at shoehorning encryption on top of it in a backwards-compatible manner, but they had issues with interoperability between clients, and also weren’t supported by all of them.

Usually this isn’t such a big deal, but I think that there’s a big overlap between people who care about encryption and people who care about federated IM systems.

Google. XMPP was getting a lot of traction so Google started to support it in it's chat clients but then after they got people on Google products they slowly stopped making all features XMPP compatible. This caused non Google XMPP clients to have a sub part experience. This pushed people to switch to Google or lose the ability to talk to friends using Google.

This is a tactic referred to by "Embrace, extend, and extinguish"

Enough people are used to the proprietary apps, so it doesn't matter for them. 0,01% of users flowing to other protocols for just part of their conversations isn't going to hurt them.

XMPP is still alive and well as a protocol, google just kinda stole it (other stuff still uses it too tho but unfederated). I know the majority of folks i talked to over XMPP were actually just using it because it was part of google talk, then hangouts, then google decided to defederate hangouts and eventually killed it alltogether but people moved to facebook or whatsapp for the most part.

Also I think the timing was off for XMPP, in large part people who used it also still used IRC for groups even though XMPP also supported groups you didn't really see major open source projects making XMPP groups to go along with their IRC channels like you have with matrix. Now what we really need is for discord to join with Twitter and Reddit in enshittification of their products so average folks get fed up enough to move over.