I just did a quick online search and it seems like the reason for removing that was that it was way too much work to maintain and stopped them from implementing performance improvements for Firefox. Apparently it was also a lot of work for extension developers, since they had to update their extensions constantly.

That's just what I read tho, I wasn't there when XUL extensions where still a thing.

Yes, after twenty years of refusing to stabilize any part of that interface.

Chrome is absolutely the villain in this context. But Mozilla has been fucking itself over since the single-digit version numbers.

i wouldn’t say inferior… mozilla extensions were more performant and flexible, web extensions (ie the initial chrome format - now a standard that most browsers use) are easier to develop, and thus there were a lot more of them