Jobs initially did not want to come back to Apple. Apple bought NeXTSTEP because between it and BeOS, Jean-Louis Gassee overplayed his hand and was asking way too much money for the acquisition. Apple then defaulted to NeXT. Jobs thought Apple was hopeless just like everyone else did at the time and didn't want to take over a doomed company to steer it into the abyss, and it's not like NeXT was doing great at the time.

>There wouldn't have been any downsides for them

Really? NO downsides???

- throwing away a decade and a half of work and engineering experience (Avie Tevanian helped write Mach, this is like having Linus being your chief of software development and saying "just switch to Hurd!")

- uncertain licensing (Apple still ships ancient bash 3.2 because of GPL)

- increased development time to a shipping, modern OS (it already took them 5 years to ship 10.0, and it was rough)

That's just off the top of my head. I believe you think there wouldn't have been any downsides because you didn't stop to think of any, or are ideaologically disposed to present the Linux kernel in 1996 as being better or safer than XNU.