No, that is a straw man argument; metux already debunked this if you go through all the comments he made in the last ~5 years, before Red Hat banned him:

https://github.com/X11Libre/xserver

The reality is much simpler. The parent corporations, mostly Red Hat really back in the days, wanted to have more control. And, in some ways, wayland is indeed simpler as a protocol.

Also, you write "replacing Xorg is reasonable". First, I don't think it is, but even more importantly than that, wayland is NOT a replacement. It is another display server and protocol. They do not have as goal to be compatible to Xorg at all, so "replacing" is the wrong term here. They indeed broke a ton of things, or rather, required of downstream applications to be rewritten - but the statement that they aim to replace Xorg is not the case. They are simply another display server + protocol at the end of the day. And they won't be a full "replacement" feature-wise either, that's why using wayland always feels like a dumbed down variant of xorg-server. Admittedly wayland also has a few new features such as the easy restart, but this may come to the new xserver too eventually. One has to wait and see. (The easy restart variant is something I like in wayland; hopefully xserver will have that too eventually. It would be technically possible. Also, xserver already is different to xorg-server, in many ways better too. Neither wayland nor xserver aim for 100% compatibility with the old, venerable xorg-server anymore.)

poor code quality has something to do with it, but is a bad reason to kill the whole protocol and ecosystem. And now that whe have LLMs it's easier then ever to clean that up. (and wayland has still not caught up after all those years)