I think a more nuanced perspective here is that roughly 80% of the work was done, and the remaining 20% require significant effort and organizational energy.
Not all of the WebExtension API surface is currently supported; there's a long tail of infrequently used extensions that require non-trivial engineering effort and often cross-team coordination to implement. However, the actual usage of these APIs in Fennec was very, very low, so the actual bet and the organization sales pitch for this work must be on building a platform, and evidently that's not happening. You can argue that this type of platform work and extensibility is why people use Firefox for Android. You can also look back at the actual usage telemetry (current whitelist is basically what vast majority of people used) and wonder if that additional investment will move the needle.
There's also front-end/back-end engineering required to fully expand existing UIs into a proper "store" experience.
Personally, I think as a matter of principle Firefox for Android should be fully open in terms of what extensions it allows installing.
I believe that will eventually happen - it's where the prevailing winds are blowing inside the org, too! but it may take time for the stars to align, people to have energy to fight through the internal malaise, to pitch work that may not immediately help with any OKRs and is mostly about building community goodwill and sending a message, etc.
As always, it basically comes down to lack of strong leadership.