

Not at all, message archive management and Push Notifications are some of the core XMPP extensions that almost any XMPP app supports.
Let me tell you an other huge advantage of XMPP for those who care about privacy: it’s called Omemo, which is essentially the same protocol used by signal. Given the current push by govs to undermine encryption and private messaging providers, it is probably a good idea to look into self hosting anything remotely related to privacy. Even if they manage to (and they will) to pass their spyware everywhere, if more people self-host it would be much more costly for them and we would see many more secure protocols popup.
Because it’s an open and decentralized protocol in the same vein as email. It is the most likely to survive in the longterm as it’s not tied to a single entity.
Fragmentation is inevitable in a decentralized protocol. Look at email or http servers, there is no standard mainstream app but a standard extensible protocol, that’s how the internet was originally designed to grow. Now that corporations are pushing their own protocols, they have an incentive to lock users in their ecosystem.