The problem of XMPP is just lack of good clients on some platforms, most notably for iOS. For Android there is an excellent Conversations.im client [0] that I've successfully use with my non-technical family and friends. (There is also Quicksy [1] that uses phone numbers for onboarding but it's XMPP all the way down). Conversations doesn't use a lot of battery (anecdata but it's 1% on my phone) and just works.

[0]: https://conversations.im/

[1]: https://quicksy.im/

As for servers ejabberd is successfully used from small deployments to big MMORPGs. The team is extremely focused on performance and from what they say XML isn't actually a big performance problem. Prosody, another server, is in my opinion also high quality, even though it's developed in free time (AFAIK).

The "myriad of extensions" is mostly solved problem due to Compliance Suites and automated testers [2] (think SSLLabs) that people use to get their servers in shape.

[2]: https://compliance.conversations.im/

For the record I've used Matrix for work too and it's not bad, the clients are decent (I've used web client), but it's not a revolution especially if one's contacts can use Conversations, that, in my opinion, is just very good.