That's why I said "stalled" and not "halted" or "stopped". I'm surprised the discussion is around the wording of the title, half of which is your choice of wording, rather than the content. It's an interesting thing that a major open source development effort has hit a road bump in development, and the steps to solve it are interesting.
So what you're saying is that Gecko (libxul) has gotten too big, and that development of libxul stuff (Gecko) has stalled until it has fixed. How is my title sensationalist? For those wondering, the bug where this is discussed is: https://bugzilla.mozilla.org/show_bug.cgi?id=709193
I agree. A non-XUL version of Firefox would be excellent. The mobile work in this area shows great promise.
Unfortunately support for embedding Gecko has been woeful, making experiments in this area difficult. The lack of an embedding story for Gecko is a big reason for it losing ground to WebKit in my opinion.
I disagree that there is no evidence in the thread that Gecko is too big. The "Gecko is too big" in the title is directly from the thread, started by a Mozilla developer.
The evidence that development has stalled is the fact that the tree for landing code changes has closed. SPDY, recently announced here, has been, or is being considered for, removal to relieve code size.