In their zeal to gain IM users, they replaced messages with chat, removing the inhibition that kept people from using messages for one liners. Then they made you always online, supplanting Facebook itself entirely with something that could be replaced by any other real-time communication app. Once phones became nicer to use and there were alternatives to the lag and limitations of SMS, people had no reason to log into Facebook to chat with their friends because Facebook has trained non-IMers to IM and they no longer needed Facebook to do it.
Users would have killed for high-resolution photos (Facebook would make pictures so tiny and so low resolution that they’d become unrecognizable and all talent that went into composing them or editing them would be lost, and they couldn’t contain text or captions because that would be compressed away) or the ability to create albums. A dozen apps existed to shoehorn that functionality in via the Flickr api. Then they had to go buy Instagram to win those users back.
Now people just post major life events to share with people they didn’t bother communicating them to via another, more personal means of communication once a year or so.