He's right. Mozilla, a $200-300 million a year outfit, currently maintains their software including Firefox. It's a huge C++ application. People who code XUL in their spare time, even a bunch of them, aren't likely to make a dent in keeping parity between a Firefox fork and the main release. They'd likely have trouble even porting it.
So, a fork is a rough solution and will have maintenance issues for an app this size.
The Palemoon developers understand the folly of ditching the flexibility of the XUL interface. They won't be removing it.