Google was federating from the start. Then Facebook started winning customers over, and they weren't. So Google also closed. When that happened, the writing was

Google was federating from the start. Then Facebook started winning customers over, and they weren't. So Google also closed. When that happened, the writing was on the wall for XMPP at Google. If you are not federating, there's no reason to follow the spec. It's a variation of the prisoner's dilemma. If one party shares and the other doesn't, the market becomes lopsided. It's why every big permissively licensed non-copyleft product so far hasn't managed to build an ecosystem outside of a few select distributors. With protocol specifications the problem is much harder. Market dominance can be maintained by slight incompatibilities.