My thought at the time, and still what I believe a large part of the reasoning is- many of those old extensions were largely unmaintained. So when Mozilla did break them, that group of users would cry out and the maintainers could potentially direct that anger towards Firefox. He who makes the change gets the blame in software.

WebExtensions also had the Chrome interop advantage, so more actively maintained extensions would be brought over, especially well-supported AAA extensions. As a result, it wasn't a net loss and longterm definitely a gain.

Mozilla for their part did say they would work with folks to poke additional holes in the WebExtensions API that would be Firefox-only, for extensions that had enough outcry behind them.

I'm pleased with where Firefox is today, but I never felt it was behind enough on performance and definitely never enough on features to leave.