> Microsoft didn't give up because they couldn't keep up
They had been lagging behind in feature support for a long time.
> it's just that they came to a realization which Mozilla's also about to come to: nobody cares what's underneath the browser UI as long as the branding and features are there.
This is an extremely short-sighted view, also from a business perspective, and one that I'm quite sure Microsoft didn't share. There are very real risks to being dependent on a single huge competitor for such a crucial part of your product, which is why IE (and, subsequently, Edge) came to exist to begin with.
The users might not care, but the company itself certainly does, because outsourcing all the internals to Google means that they largely lose control over their user's experience and, by extension, over the UX of their own product.
> And in the end ~500 million dollars per year should be more than enough to maintain one software project.
Mozilla isn't just "one software project".