Overall, I don't think Mozilla is wrong. Without the Google Search deal, Firefox will have less resources to build a competent browser.
But Mozilla has also done a poor job at becoming financially stable without this search deal. It also doesn't help that Mozilla's CEO's salary keeps going up in spite of the declining market share.
It would have been nice is Mozilla was able to fill a niche like Proton: building a suite of secure and private services. But instead they're moving towards advertising.