They could try. I just keep hearing people who would pay for no extra features as long as it paid for actual Firefox development and not the random unrelated Mozilla projects. I would pay a subscription. But they don't let me.
If they can convince me that some subscription for firefox will strictly go for firefox development, that firefox will not pivot to ads (privacy respecting or not), and all the other stuff they have, including executives' salaries and whatnot, are completely separated, I would be more than happy to subscribe.
There are people like yourself who would be happy to donate, but not nearly enough. Replacing MoCo's current revenue with donors would require donations at the level of Doctors without Borders, American Cancer Society, or the Make-a-Wish Foundation.
Turning into one of the largest charities in America overnight simply isn't realistic. A drastic downsizing to subsist on donor revenue also isn't wise when Mozilla already has to compete with a smaller team. And "Ladybird does it" isn't a real argument until and unless it graduates from cool project to usable and competitive browser.
What I understand they are saying is that donations wouldn't be nearly enough. Which is related to what you wrote, which is that you would gladly donate to Firefox (not Mozilla, but Firefox).
They compared it to the largest non-profits in America, presumably because if we look at the money spent by Mozilla every year, that's similar. Right now Google pays for Mozilla, and if you wanted to replace that with donations, it would have to become one of the biggest charities in America. Which does not sound plausible.
If I understood correctly, I'm not the OP :)
You're forgetting that people will buy a product on brand identity alone. If the Firefox brand is solid enough, those forks won't matter.
I think the argument makes sense, to be honest.