Yea, it was great. But it was more lack of maintenance than anything. The original chat devs were passionate about open federation. The new devs were not.
Add to that it was a big source of spam that nobody wanted to deal with.
Apparently the team tried really hard to get more companies on board with opening up federation. But I think the only "major" service that did was what was left of AOL.
Every decision since then has been pro-ad network technical competition.