As someone who got quite excited by Blazor and gave it a very fair shot, I can totally understand Microsoft's position with Fluent UI. Blazor is technically very impressive. But, in practice, it has very strong negatives. For example, the initial page render is going to always be very slow for a user. Because the browser has to download the CLR. Compared to this, a react web page, particularly one with server rendered components is going to come up lightning fast. By and large, the market has mostly settled on React at the moment. That is where the momentum is. And Microsoft sees the writing on the wall.
