They've recently shoehorned "Chat" tab into Gmail, of all places! So no, folding together apps is not always a good thing.
But it never wasted valuable screen estate in a mail app to make you know that you can also chat. There was a separate app for that.
Yes it was. Look at the last screenshot in this article from 2008:
https://techcrunch.com/2008/06/06/the-evolution-of-pre-launc...
Chat has always been there though. I've used it every day for almost a decade on my work gmail account (I don't open the separate page or use a standalone client).
Web version of Gmail did have a Gtalk widget, but it could be collapsed / hidden with a couple of easy clicks