Except they are and they do. Last I checked, Chrome was still gaining, not losing, on Firefox. Or more accurately: Firefox is losing whatever tiny userbase it still has, while Chrome already is the new IE (hell, even the new IE is Chrome).
For nearly a decade now, the only reasons to use Firefox instead of Chrome is, first and foremost, because Firefox is not made by Google, and secondly, because it had some extra technical flexibility that made the overall worse general-audience UX tolerable. The more Firefox loses on that technical flexibility, the less reason there is to use it.
The ones who didn't care for such extensions might have jumped ship earlier, but advanced browser extensions were non trivial sticking point for a lot of the remaining user base
At the moment Firefox is a memory and processor hog (Chrome sometimes seems to have improved now). Only some ad-blockers keep Firefox alive.
When Chrome kills ad-block (something that Google seems to be working on), then probably more people will come back to Firefox. But at the moment Firefox (even with ad-blockers) is a worse product than chrome.
But think how many blog posts were written and how many people used Firefox as a stepping stone in their careers. Who cares that the product is just genuinely bad now.
Also Firefox was always "the" customizable browser that all the techie people used. It spread via word of mouth - "hey, your browser does not show those nasty ads all the time, how do you do that". Or the techies installing Firefox to their family. At the moment you barely have an incentive, since Firefox feels like mostly a re-skin of Chrome. And bad at it too.
But the problems with extensions started far earlier. It was a common joke how every bigger update broke many popular extensions, made some of them even impossible. In the early days of Firefox, extensions very growing wild and rich. But over time so many were dying a slow death. At the end of the early days (around Firefox 3 or 4), mostly nothing was left, and Firefox was already significant crippled in ability. The later removal of XUL only gave it the last hit.
Today it's basically a handful of popular extensions who keep this feature alive, and most of them are just Adblockers.