As a long time Firefox users, ( back to Netscape Netvigator Era ) I think what Firefox / Mozilla end up now were faults of their own, and personally I think it was their Management's problem.

From My Memory:

If we look back now from a grand Overview, IE5, IE6 and IE 7 wasn't that much difference. And these browsers were formed and used widely during the Internet explosive growth era. M$ didn't care about Web Standard, and they dont want to improve either. So in the very early stage of Web and Internet we have a Industry Giant stopping all the improvement to make the Web usable.

And the Firefox "movement" started, not only is Firefox leaner, faster, better and there were a lot of love and organisation pushing for it, at least from a Web standard prospective, they ALL wanted something better then IE. From Macromedia, Adobe, Yahoo, etc.

And Firefox wasnt that good of a browser, it was simply better then IE. So you could argue Mozilla were simply in the right place at the right time. And it didn't really succeed like Chrome had now, at its best Firefox only had 30% of the market share.

We all wanted a faster browser. And Firefox didn't deliver, somewhere around 2008 Google show the world what a fast browser really meant. In reality we already knew how fast it was possible looking at ( old ) Opera. ( Opera failed to gain traction because it wasn't playing well with old IE code. ) Being Google they get a lot of press about it. And since Google being the Gateway to the Internet, we all knew if your site dont play well with Chrome, what the possible consequence were.

If I remember correctly, 2008 was around Firefox 3 time. Lot of bloat were already added to Firefox. People wanted a Multi Process ( a la Chrome ) and a much faster browser. And e10s ( Electrolysis ) were born. What was suppose to be an Firefox 4 features nearly became Duke Nukem Forever, shipped sometimes this year, in Firefox 5x.

Reading from the post and comment, Mozilla never intend Firefox to win the browser war and hence it didn't matter. Sometimes in 2010 or 2011, Firefox 4 was released, If I remember it was a long delay at the time when Chrome was rapidly improving. But Mozilla didn't give a damn, they thought offering an alternative was enough. And they were happy with their market share. They thought both Firefox and Chrome will both eat into IE's market.

They thought they were safe on the Desktop, or they didn't care, or they really think they could do another Firefox in Mobile Market. So they decide to neglect the much needed attention of Desktop Firefox, and start chasing the Firefox OS for Mobile. Only this time, their oppenont is no longer Microsoft sitting still with IE, it was Apple who has a head start of nearly 10 years if you include the R&D spent before the release of first iPhone. And Google who has a head start of nearly 5 years with 100x the resources of Mozilla, and Google actually has an Engineering company culture compared to Microsoft.

You could argue Mozilla were very noble to put up a fight ( if it was ever a fight at all ), or they were, silly. Not only did they choose the worst possible tools to develop on, ( They wanted EVERYTHING to be Javascript ) they also aimed at the WORST possible market segment, the low end $25- $50 dollar Smartphone. So they want to use an inefficient system + tools with the lowest end Smartphone. And they thought it was an good Idea.

Fast forward a few years where they still could not accept defeat on their Mobile OS, no pivot, their Desktop Firefox was making a slow death. Browser Market share used to an Interesting Story, Ars used to run an article on it every month, and now no one cares.

And Later Firefox OS was stopped, my guess were the new Desktop Firefox finance wasn't enough to continue it. Mozilla relent and supported H.264, which it didn't support for the longest time it could. The Never Firefox on iOS became an Abandoned Firefox Sync, discontinued, and reappeared on iOS again.

So Mozilla, by putting it Values and Ideals first, even if it is against its own users' interest or UX, lost its user base, and with that also lose the influence it onces ( barely ) had on the Web.