I was I heavy XMPP user back in the 00s. But on the whole it never really took off, and when Google killed XMPP support in their chat it was a severe blow. As for why it didn’t reach a larger userbase, I think the reasons that Moxie described in
The ecosystem is moving[0] are spot on.
[0] https://signal.org/blog/the-ecosystem-is-moving/