Jabber rode the wave of "everything must be xml". Try debugging anything that's based on irc - you can do it using telnet (and/or tcpdump, if you need to see full client-server interactions). Now try doing the same for Jabber. Typing xml snippets into telnet is not pleasant.

In the glory days of IRC, everyone was using it. Now most social medias have replaced the need for it. I think that what really killed IRC was msn/icq, specialised and targeted chat instead of meeting random people (which is quite hard to do these days).

IRC was the precursor to many specific stuff that later gave whole industries. Stuff like online dating didn't exist, interest groups like #linux or regional chatrooms like #Montreal. I think that jabber rose during the fall of IRC but they didn't manage to catch the fleeing users since their service is quite similar to what people were leaving. Since the web caught on online dating and such, IRC and jabber became less and less interesting for most of their former users.

Critical mass (or the lack of it) would be my guess. Social tools are not very useful if you are using it alone. And switching IM requires quite a lot of momentum imho.

And there are some technical stuff too. Jabber is much heavier and noisier protocol. And afaik there isn't a Jabber client comparable to irssi yet.

IRC client running in background is non-obtrusive, while Jabber is primarily intended for IM, which means frequent distractions. I know many developers who do not use any kind of IM, while they frequently chat on IRC.

What was the reason for developers to switch over? "A better protocol" isn't a good one.