Right now Magit is hosted on Github and anyone can contribute by just sending a pull request.
If it were part of Emacs you'd need to use the FSF's collaboration tools which have a higher barrier of entry, and if you're a first-time contributor with a non-trivial contribution you're going to have to wait days/weeks as your copyright assignment papers make their way over snail-mail.
I've contributed several (trivial) patches to Magit, zero to Emacs itself, and would likely have contributed zero to Magit if it had been an FSF project to begin with.
I think the FSF has gotten their priorities seriously wrong. The package is already licensed under the GPLv3, they're wanting to subject everyone to a more onerous contribution process to guard against the edge case of someone ripping off one specific Emacs package and the FSF not being in a position to have standing in court if they wanted to sue them.