Yep, it found a "niche": people could actually hack on it and get it to do stuff, rather than waiting around for the other thing, which wasn't even really a thing yet anyway.
Linux has a large, large established user base at this point. If you want to attract people to a different platform, you need a compelling reason.
For people just looking to look/experiment/learn/play, 'something new' that's more easily understood because it's small might be enough, but that's unlikely to be a large user base.
I think you missed the point of that comment completely.
Which market segment does linux not totally dominate nowadays? Phones, big servers, embedded devices, HPC... Maybe you could argue desktops? Maybe? Still a very signficant player there however you dice it.
Going back to Linus' original email announcement then apply your framework and you don't predict linux competing anywhere let alone dominating everywhere. How could anyone? Smash Sun, IBM, HP all of them. No chance. None.
The future, it's really hard to predict except in hindsight.
The fact that Linux dominates does not entail that other architectural approaches may be more suitable for the task. Variety is the spice of life and the “Linux monoculture” might not be such a great thing. BeOS/Haiku, Plan9/Inferno, OS400, and Fuchisa are all fascinating lineages that excel in their chosen domains.
Going off base, as this is about Hurd vs GNU/Linux.
On the IoT space it seems like not everyone is keen in having to deal with GPL and Linux, hence the myriad of FOSS MIT/Apache licensed OSSes that now exist.
To be completely honest, there are people against the GPL just about everywhere.
For the same reasons, there are also people just about anywhere that do find value in the GPL.
The license is there for a reason, and its working.
Linux is amazing what you can do with it. You can implement things in a day that you simply couldn't afford otherwise. And it's probably a 100-1000 times less reliable than systems architected around actual RTOS's.
Linux, (not big and professional like gnu), is not going to win but could find a niche somewhere. Hm, ok.