Firefox may be dead simply due to Mozilla not having any long term strategy vision about how to stay relevant. The issue isn't that Chrome doesn't have extensions now, but what is Mozilla doing now to plan for the future when they no longer have the extension advantage. So far it looks like nothing.
Even Firefox's vaunted new JS engine in 3.5 isn't going to be turned on for extensions, only web content. Meanwhile not only does Chrome's extension code get the V8 love, they also run as a separate process, which means they won't impact performance of browsing as much as Firefox's extension framework does.