XMPP was old and broken and way too barebones as a Protocol by the time matrix replaced it. Everything that made it usable was an extension that not all clients supported. This way, you had all kinds of bullshit happening between different clients. Encryption was an optional addon, and thw first message was always unencrypted, bootstrapping encryption with another person was a nightmare, and multiple clients per person were barely supported.

It is a protocol of a different time, easy as that. Google Chat has nothing to do with the (recent) death of xmpp. It continued in its niche until something better (matrix) came along.

Source: used xmpp daily before finally switching to matrix, which works way better.