Nothing is wrong with competition. Their response to it, however, clearly isn't working in their favor. Their apparent lack of willingness to move away from this failed path is further hurting them.
If they don't provide quality software, then they won't have users. If they don't have users, then they won't have influence. If they don't have influence, they don't have any real power to assert their "open web" philosophy. The less power that Mozilla has, the more power their competitors will share, including those with a much different philosophy.
If they don't have influence, they don't have any real power to assert their "open web" philosophy
A philosophy does not assert itself by having power, it reveals its value (or lack thereof) to the honest thinker, and has that value regardless of the existence of such thinkers.
That kind of thinking is nice and all in the academic world, but in the real world a philosophy is absolutely useless unless some person or organization has the ability to put those ideas in to practice.
By losing market share, Mozilla is losing influence, which will inhibit their ability to introduce more "openness". Their philosophy will become far less useful, and its value will decrease, if it can't actually be implemented.
Why are you putting open into quotes? Anyway, the Nineteen-Eightyfour approach to what is true or right never did it for me.. utilitarian love for wisdom is not something that can actually exist.
If they don't provide quality software, then they won't have users. If they don't have users, then they won't have influence. If they don't have influence, they don't have any real power to assert their "open web" philosophy. The less power that Mozilla has, the more power their competitors will share, including those with a much different philosophy.