I don't think it's too late. I know the people working on http://matrix.org/ and I trust them to get the technology right. But as we know, popularity depends on a lot more than the technology.
My only gripe is what took so bloody long. Google Talk debuted 10 years ago and IIRC had an online unified message archive (in gmail) for as long as I remember (2007?). It took 8 years to replicate that feature? "Good enough" ethics at work indeed.
(disclaimer: I work on Matrix)
You don't like the jabber priority based method of dealing with multiple connections. What would be better?
The presumably protocol-level problems are that you can't "upgrade" a two-person conversation to a groupchat, and that a groupchat is an entity in its own right belonging to a particular server, which is something the user really shouldn't have to care about (and also causes reliability issues). And that there's no history.
Beyond that the user experience in every client I've used is terrible: open a dialogue to list available groupchats, manually join one, accept the notification, manually rejoin if you're disconnected. And then you tend to get notifications on every message, rather than just on messages that mention you; purely a client problem, but fundamentally if there are no good clients then it leads me to suspect there's a deeper problem.
Just compare with the groupchat experience in Slack or Skype or heck, AIM.
> You don't like the jabber priority based method of dealing with multiple connections. What would be better?
Send messages to all connected clients for the account, like virtually every other protocol does. And sync history between them. I can accept that that's hard without a centralized server, but it's vital.