alt Hacker NewsXMPP has had less allure as "the new thing" since it's been around for a very long time. It was _the_ chat protocol in the 2000s when it started, and all chat apps used it (when AOL Instant Messenger, Trilian, Purple, Yahoo, ICQ, etc all interoperated). Vendor lock in started taking off not long after though, so Facebook Messenger (also originally XMPP) stopped interoperating and went fully closed along with a number of others, and the ones that interoperated didn't shift business models and disappeared. None of that means there's anything wrong with XMPP, it just means it's not in the public mind.
IRC has been getting the retro nostalgia kick start, and it briefly came back to attention when Slack started as "wrapper" of IRC. In my experience IRC channels are used by about 50% of open source projects, even though it's abysmal for access on mobile devices, very unfriendly for users, and extremely limited in functionality. About 50% of those have a bridge to Matrix so the mobile access is at least somewhat solved, and there are some more usable client options.
It seems because you haven't seen people already adopt it, you believe it must not be good. I'd encourage some basic research for your own benefit so you can see how XMPP is way easier to setup and maintain, far more efficient, and more capable than the oddly more commonly used Matrix/Element. In fact, between the organization issues of the last couple years, everyone finally getting fed up with Matrix being brittle, unmaintainable, and extremely inefficient to run on a server, I would expect Matrix support channels to drop off very rapidly over the next few years.
> It seems because you haven't seen people already adopt it, you believe it must not be good.
On the contrary, I have been hearing about it for so long, I believe there must be something there.
But maybe there is something fundamental in the fact that because it is actually interoperable, it's a lot harder for it to get traction. If a client gets a lot of traction, it probably quickly gets tempted to leave the interop world and do whatever they want (and lock the users in). In other words, XMPP sounds like a success story of diversity, but the cost of that is that normies don't even know what it is. Similar to Linux in a way: if someone gets interested in Linux, the next thing they see is a gazillion different distros and people arguing about them (disclaimer: I have been a Linux user for 15 years).
Matrix is different in the sense that it does not look like a success in terms of diversity. Matrix is pretty much Element. And Matrix seems to be about converting everybody to Matrix: I have seen bridges to IRC that made the IRC experience so bad that people would move to Matrix. Not because Matrix was necessarily better, but because Matrix was killing the IRC experience.
In a way, I find it interesting that those "interoperable protocols" (both Matrix and XMPP) are all for diversity, as long as it is their protocol. XMPP wrote a blog post about the EU Digital Markets Act, saying something along the lines of "the DMA is a good idea, the only thing that they miss is that they should force everybody to use our protocol, XMPP". Matrix has a similar stance: "we don't consider it interoperability if we can't make it work with our protocol, no matter how much we destroy the experience on the other platform". Because the end goal is not really interoperability: it's interoperability under their conditions.