Servo was never supposed to be a browser. It was a testbed for new browser tech/components, some of which got ported into Firefox. I had hopes that Servo would also be an embeddable browser engine, but not sure if that was ever a serious goal.
Servo still exists and has been spun out of Mozilla's org (https://github.com/servo/servo/). Certainly development will be slower without a dedicated, paid team behind it, but it's still alive (last merge to master was 9 days ago). And perhaps without Mozilla's direct control, it will actually end up becoming the browser you hoped it would be.
I give Firefox browser engine 5 years top before Mozilla becomes Chromium based. Servo WAS meant to be the future had Mozilla continued to fund its development, there is no way around that fact. Yes, it was experimental, but so where every other browser engines/forks when they started. Mozilla lost a lot of goodwill when they fired Servo team and most of the Rust developers.
I don't think we do, but I think there's value in another large-minority browser that is based on Blink (not Chromium). It should have all the compatibility that Chrome has, but none of the privacy issues. Mozilla could potentially pull that off, but it'd likely mean more or less starting from scratch (not sure how much of the UI they could reuse, if any), so I wouldn't expect that to happen except as a last resort.
I do feel like most of the arguments against Firefox boil down to either website compatibility or performance issues. Using Blink as their rendering engine would kill the first concern completely. I'm not sure if Firefox's current performance issues (real or imagined) are due to the rendering engine or UI, so not sure where that would land.
Servo still exists and has been spun out of Mozilla's org (https://github.com/servo/servo/). Certainly development will be slower without a dedicated, paid team behind it, but it's still alive (last merge to master was 9 days ago). And perhaps without Mozilla's direct control, it will actually end up becoming the browser you hoped it would be.