In a multi-device/mobile world XMPP is shit. HN constantly complains about Slack/Hipchat/etc "Reinventing the wheel". "We have IRC and XMPP" they cry without stopping for a second to understand that IRC/XMPP as not trivial to setup correctly, mobile support is complete shit, without things like bouncers or servers to hold all your messages you can lose things and stuff not be in sync, clients can't really add features unless all client can support it, and more.
Does it kind of suck that the dream of federated chat died/is dying? Yes but if it doesn't support what users really want then it's the standards fault. I don't blame any of the major players for pulling support, it wasn't going to move fast enough so they ditched it and built something that would.