While I definitely prefer FF and Android, I can support the notion of Mozilla integrating extension support into WebKit on their iOS version of FF. But it would take a lot of effort to do that, and Firefox for iOS is ultimately just totally separate from any other Firefox (whereas Android and Desktop Firefox share the same innards).
I guess they could take the approach of drawing the whole screen themselves but that’s going to make Gecko-based Firefox for iOS feel noticeably worse than the current WebKit/UIKit version in terms of responsiveness and such and might require some legwork to properly support VRR on 120hz iPhones (which is critical for battery life on those models).
At this point it's just a polite fiction, maintained jointly by Apple and app developers, that allows Apple to maintain a somewhat straight face when saying things like "you can't download third-party code at all" or "all code extending app functionality must be downloaded through our designated mechanism".
iSH is one such app, this blog post is very interesting: https://ish.app/blog/default-repository-update
Given the current regulatory scrutiny of their app store, I believe they just don't want to open yet another can of worms by rejecting "browsers" (which are really WebKit wrappers) for injecting third-party JavaScript into all web pages displayed within them, even though by their own rules, they arguably totally should.
Back in the day, they were removing stuff like scripting apps. They sent warnings to the devs of Pythonista, forcing them to do things like [remove file-opening support](https://mygeekdaddy.net/2014/06/17/working-around-apple/). And they infamously removed iDOS (a DOSBOX port).
Now they're much more loose and allow things like iSH and so on. It is still a little bit of a gray area for arbitrary decisions by Apple, though.
