But then they decided they needed a mobile-specific experience and created the current dumbed down version with limited add-on support.
Because the typical user will ignore the warning and install the extension. Then down the line Firefox will be slow and they forget why. Then they uninstall Firefox.
Sure, you can avoid this trap personally. But the statistical behaviour is harmful to a healthy Firefox userbase.
If you want the typical user to use Firefox, setting yourself apart as the mobile browser that has extensions for example, or keeping features that people use and like as they used to do when they had dominant market share would be good ways to do it. They used to understand their selling point.
And beyond that, as I have personally seen using iceraven and others have noted in here, tons of extensions that firefox blacklisted work fine and have for years. They still blacklisted them. Even if we agreed that disempowering the user so that they have a good experience made sense, which I don't, the actual number they would've needed to blacklist would've been much lower than the ones they actually blacklisted. In at least one of those instances the stated reason was a blatant lie.