Now, that is quite a stretch. We had almost 15 years of zero interest rate economic policies, all the "cheap" capital available to everyone and you are telling me that none of the companies with a vested interest in XMPP managed to get resources to grow because Element was sucking out all the air from the room?
If getting XMPP to be in a state that could compete with the proprietary messengers were that much cheaper than the resources taken by Element, why is it that none of telcos pushed for it to have something to show in the OTT space? Or why couldn't Process.one/Prosody get any VC interested when there are so many firms that make a living of just copying whatever is trending?
You are trying to rationalize XMPP's failure to get more adoption by blaming Element, but this is not a zero-sum game. I've been to XMPP meetups, and absolutely no one ever talked about initiatives to make it more appealing to masses. Everyone just wanted to geek out and scratch their own itch. If the XMPP community never valued commercial success, fine, but then don't act like someone else robbed their lunch when all Element did was do the work that XMPP supporters didn't want to do.
So, companies working on XMPP are healthy and thriving, but they can not afford to extend into the consumer space because... they don't want to go up against Discord?
Then you make a separate entity to take risks in that space, kinda like what Amdocs did with Matrix?
I'm sorry, you can't have it both ways. Either XMPP consumer XMPP is in a dire situation because Element beat ahead of the others due to their VC funding, or businesses working on XMPP are not interested in the consumer space because they don't see it as worth the risk. But it makes no sense to claim that Matrix has achieved bigger mindshare with no actual merit in making a more accessible product, and that XMPP is acceptable as is.