Apple didn't get left in the dust as much as "quit" when it looked like the business was just going to get harder ( competition from two directions). First there was a trendline by the major ISP providers to have 'all in one' boxes ( modem + router + wifi). The ISP providers were given this out to customers by default. So trendline heading toward ISP provider maybe going to zone where router is 'free' (built into the service fee). How is Apple going to compete with 'free' ? [ The 3rd party modem consumer market is nothing like it was back in the early 2010's. 'Motorola' / 'Zoom' / etc ... lots of major players gone. (and not just through mergers/buyouts/consolidations ). ]
There was no thing that we have now with the super high end wi-fi routers costing more than a mac Mini. 2013-2016 there is more an expansion in the sub $100 wi-fi routers than very expensive ones. Vendors like TP-Link were going to completely commoditize a vast swath of the market.
Around 2014, The mesh systems were coming at the higher end. The smartphone controls (as opposed to quirk web interface) was no substantial barrier to entry; especially when had an Android App to expand user base. Some of the foundational elements of mesh were being standardized.
Apple likely quit because they thought it was going to a similar route that laser printers went. If they knew there going to be a in-house radio transceiver company at the time perhaps and folks would be commonly selling Wi-Fi 7 routers at $200 , they might have stayed in, but that likely was not on the roadmap in early 2010's.
P.S. Time Capsule is a 'better than nothing' back-up , but the canonical usage that Apple implicitly endorsed ... single point back-up to a non-RAID drive is asking for trouble long term when the back-up drive either fails or gets corrupted.