You have to remember that when Gmail was launched it was considerably better than most desktop mail clients at the time.
It had auto-complete for who you wanted to email (prior you had to manually type their email address).
It came with an eye watering amount of storage (1 GB).
Worked from any computer (when POP was common and downloaded the emails locally to that desktop computer).
And more.
So it wasn’t so much that Gmail is “good enough”. It was more like desktop clients saw how much better Gmail was and didn’t think they could compete - also given that Google provided the hosting as well which allowed for tighter integration - something a desktop app alone could ever do.
Note: I'm not saying I think Gmail is a great experience. For web, I personally really enjoy Fastmail and for desktop - I surprisingly have grown to like Outlook. What I am saying is that when Gmail was launched, it took a lot of wind out of the sails of desktop mail app creators.