1) They could fork it, adopt standardized changes, but continue to innovate on it if they like

2) That wasn't my point. WebKit derivatives clearly won. Does Firefox even need to also own an engine when their goals seem to be entirely around the browser product?

A fork that tracked Blink upstream would still leave Google with control over the direction of development. A fork that diverged from Blink would end up equivalent to an independently-developed engine.

Adopting Blink would, furthermore, impose a set of design and architectural constraints not necessarily in line with Firefox's priorities as a project. With Gecko they're investing in parallelism and pulling in more and more components from Rust/Servo, for example.

Firefox has been something of an underdog from its inception, releasing at a time when IE had already "won". Chrome taking that spot won't make Mozilla scrap everything and start over—this is familiar territory.

Of course, this is all ignoring the absolute upheaval and loss of momentum a total rewrite on top of Blink would wreak on Firefox as a project.