What matters is how useful users think it is. Whether developers think the code is beautiful is less important for adoption.
And your second paragraph misses the point: it's not about one of the factors, it's about balance between them. In this particular case, the amount of users who prefer XMPP doesn't seem to be big enough to counter the pain of supporting it.
Wow, I can easily imagine much better interfaces. In fact I don't even have to imagine - Mercurial is way nicer.
What I really liked was the very friendly and usable command line interface, out of the box shortcuts (which I now emulate in my .gitconfig), clear help pages. It was a bit slower than git for enormous projects but it worked wonderfully for me.
More familiar because it was essentially subversions interface made suitable for a dvcs.
Worse for lacking (or requiring plugins for) features like the index, commit amending, rebasing, lightweight branches, etc.
Why.