It wasn't much of a rewrite (at least of the underpinnings) and embedding was always fragile even when it worked. A lot of this is XPCOM overhead which can't be completely eliminated.
I think the lack of embedding has hurt Gecko showing up in more projects. Their solution was XULRunner which inverts the model by embedding your app in Gecko instead of the other way around, and they don't even support that anymore.
I'm hoping GeckoView takes off on Android and makes its way back to desktop, but I'm afraid that will happen too late for people to care about it anymore.
