That is all technically correct (best kind). But that’s not how it’s viewed by the scores of people new to web development. Broadly speaking, you can use both to create a dynamic UI, just at very different levels of abstraction. And at the time when an ExtJS license cost hundreds of dollars and jQuery was picking up pace and was proper FOSS, someone new to web development would be much more likely to reach for jQuery.
The problem with jQuery was that it was almost good enough: it has a system of plugins which were abused to no end to make things like morals and calendars and whatnot. And then there was jQuery UI which promised all the loveliness if jQuery but for UI (I still shake a little when I remember it).
jQuery was and still is great as a helper for “I want to show/hide this thing on the page”. It’s just the show/hide behavior can quickly morph into 2-4K lines of spaghetti code manipulating all the UI and having all the business logic built in.