Because browser wars are expensive (look at how much money Google had to throw at Chrome to make it the #2 browser), and browsers are hard -- finding people who are qualified to work on browsers is not easy.

Well, yeah, those competitors could (leverage Google's OSS against it).

But an open source community, outside of some company control, not as easily if at all.

Take for example Mozilla/Firefox.

Well, didn't it do very well, and in many places, won over IE? It did. But it did it:

(1) Starting with the branding/product/code made by a huge (at the time) company (Netscape).

(2) Having mostly people from said company working on the Mozilla version.

(3) When Netscape died, it almost took Mozilla with it.

(4) Firefox revived the interest in the browser big time, but Firefox lives on a $100M a year Google subsidy.

Would Firefox still be worked at a competitive pace without Google's money?

I seriously doubt it.