They likely buckled under largely because the users wanted to be able to watch Netflix, and there was no way that Mozilla was going to convince Netflix to adopt a different solution. So they had a choice of either being the 1 browser that doesn't work with Netflix (and other streaming services like that), or joining the crowd. Most users don't care about DRM for things like Netflix; if you don't like it, you don't have to use it. No one's forcing you to subscribe to Netflix, and it's not representative of the rest of the web. (It is totally unlike, for instance, sites like this, or news sites with articles, or blogs, etc.) It was a pragmatic choice: either work with popular sites that people like, or become irrelevant because of some extremists. Those chose to remain relevant.

Ad-blocking is not the same. Ad-blocking doesn't prevent you from seeing most sites (and for those that it does, you can selectively turn off the ad-blocker; you don't have to ditch your browser). What incentive would Firefox have to prevent people from installing an ad-blocker? If they did that, they'd lose whatever relevance they still had, because people would just switch to Chrome.