I was in on this discussion on the W3C mailing list, this summary is fairly accurate. The objection of Mozilla, Google (you forgot Apple, who also made a formal objection), along with bunch of others who waded in, was essentially that the DID people were asking the W3C to rubberstamp a specification which was going to launch with no interoperability. And with 150 odd "schemes", analogous to URL schemes (http, ftp etc) it doesn't look like interop was going to be forthcoming any time soon.
As a technical argument this made a lot of sense to me, and I got the clear impression it comes from the W3C being much less inclined to put its stamp on specifications which are at idea stage than it was 20 years ago. Now, they want testcases, they want interop across vendors, they want practical examples and I agree with all of that. However the DID folk came back and said this should to be approved as a standard first, with schemes to follow. Ultimately it's a judgement call, and this one favoured the DID folk. They had clearly worked hard on it, the objections were just that it needed a bit more first and what was the rush for a publication? But good luck to them I suppose. I hope they make something useful of it. And if it dies on it's arse for being too handwavy, it won't be the first spec that's gone that way.
A parallel side debate was whether the W3C should be approving anything based on proof-of-work. Fortunately what was approved this week has not sanctioned that, but it's a fight we're going to see again in the W3C - some very principled and entrenched positions were on display, and in my opinion some very blinkered ones too. One for another day.