This is just admitting defeat. There is no reason Emacs couldn't be the number one editor right now. GNU projects in general all tend to fail to innovate and seem to ignore the last couple of decades of learnings.
There is a simple reason for it not to be number one: The developers and users do not care for it to be.
I certainly don't. As long as Emacs has hit critical mass (which it trivially has), it is good enough for me.
The number one selling car is Toyota. You wouldn't go and say Porsche is an inferior product because they are not the number one selling car.
I suspect you're right that under different stewardship Emacs could have taken over the wold. And who knows, if they cared to run usability studies on the initial user experience it might still be possible.
> This is just admitting defeat
If you assume that everyone values popularity or ease-of-use then this is a reasonable conclusion.
But if you'd forgive some unsolicited advice: assuming everyone shares your values will make it hard to understand or predict other people's actions which will hinder your attempts to communicate, negotiate, or manage anyone not like you. It may be simpler to imagine they're crazy, foolish, or deluded but personally I've found it useful to operate under the assumption that their values are real and just as valid as mine.