I think the biggest reason we don't see a bigger adoption of federated XMPP is because unlike email chat wasn't seen as a serious communication tool or essential for business until recently. I feel like it was seen as a nice to have "toy", almost something for the kids growing up on the internet to use to talk where as "real" adults used the phone or wrote "digital letters".
For that reason it was never bundled with your internet connection like email and so the main stream masses never learned how the federation worked. So when stripped down versions with no out of the box federation (see Google and Facebook's early chat offerings) started to became popular it was easier to pull up the walled garden with impunity.
As they were able to introduce the new bells and whistles faster because they could safely ignore federation issues they could then have nice differentiation's from other competing chat networks
While rarely seen that way my employer was using XMPP in 2006. It was great for compliance when one couldn't be leaking client data into AOL instant messenger.
For that reason it was never bundled with your internet connection like email and so the main stream masses never learned how the federation worked. So when stripped down versions with no out of the box federation (see Google and Facebook's early chat offerings) started to became popular it was easier to pull up the walled garden with impunity.
As they were able to introduce the new bells and whistles faster because they could safely ignore federation issues they could then have nice differentiation's from other competing chat networks