With all due respect, this is a completely HN-brained take.
No significant number of users chooses their browser based on support for image codecs. Especially not when no relevant website will ever use them until Safari and Chrome support them.
And websites which already do not bother supporting Firefox very much will bother even less if said browser by-default refuses to allow them to make revenue. They may in fact go even further and put more effort into trying to block said users unless they use a different browser.
Despite whatever HN thinks, Firefox lost marketshare on the basis of:
A) heavy marketing campaigns by Google including backdoor auto-installations via. crapware installers like free antivirus, Java and Adobe, and targeted popups on the largest websites on the planet (which are primarily google properties). The Chrome marketing budget alone nearly surpasses Mozilla's entire budget and that's not even accounting for the value of the aforementioned self-advertising.
B) being a slower, heavier browser at the time, largely because the extension model that HN loved so much and fought the removal of was an architectural anchor, and beyond that, XUL/XPCOM extensions were frequently the cause of the most egregious examples of bad performance, bloat and brokenness in the first place.
C) being "what their cellphone uses" and Google being otherwise synonymous with the internet, like IE was in the late 1990s and early 2000s. Their competitors (Apple, Microsoft, Google) all own their own OS platforms and can squeeze alternative browsers out by merely being good enough or integrated enough not to switch for the average person.
I don't disagree with you, but given (A) how will Firefox ever compete?
One possible way is doing things that Google and Chrome don't (can't).
Catering to niche audiences (and winning those niches) gives people a reason to use it. Maybe one of the niches takes off. Catering to advanced users not necessarily a bad way to compete.
Being a feature-for-feature copy of Chrome is not a winning strategy (IMHO).