Then “free email” providers on the early consumer Internet were able to compete on things like storage, because that was something it was still acceptable to expect people to pay attention to. One of GMail's original big draws was “lots and lots of storage”.
Email being in decline for social purposes feels partly related to changing feedback expectations and UI inertia, but I'd guess also some relation to a “mental association with uncool things” including both spam and stressful/boring transactional email; it's become more of a business thing. The spam side of that is related to the gradual federation lockdown, and something similar could happen to Mastodon, but at least there's some discussion about it happening in advance now.
I'm not sure what this all adds up to.
Only true if you care about Gmail (a centralized service) getting your e-mail and delivering it to its users. You could just not care about Gmail and still interoperate with lots of mail servers - even lots of servers that do have Google's blessing.
It seems to me that Mastodon gained traction in a way that wasn't much different from email. In both cases there was a communication network which anyone could add a node to pretty easily. Your node could have local moderation policies and you wouldn't have too many issues with getting blocked as long as you acted nice. For both email and Mastodon this enabled a few motivated administrators with some influence to onboard thousands of users quickly, and benefit from a network effect bigger than just their node.
The similarities to email end when you consider _why_ people migrated to the network in question. With Mastodon the waves have been culturally/politically motivated people running away from something (ex-Twitter users fleeing abuse, Japanese loli enthusiasts trying to avoid embarrassment, sex workers seeking an alternative to SESTA/FOSTA regulatory deplatforming). Whereas with email people were running _to_ something - the first free, global communications network of its kind.
It's also interesting to note that email nowadays has lost these advantages (running a server is much tougher now and you can't really pull it off without blessings from Google and others). Sure enough email is now on the decline.