In the early years after 2000, FreeBSD 4 had a much better performance and reliability in any networking or storage applications in comparison with the contemporaneous Linux and Windows XP/Windows 2000.

However, in 2003 Intel introduced CPUs with SMT and in 2005 AMD introduced multi-core CPUs.

These multi-threaded and/or multi-core CPUs quickly replaced the single-threaded CPUs, especially in servers, where the FreeBSD stronghold was.

FreeBSD 4 could not handle multiple threads. In the following years Linux and Windows have been developed immediately to take advantage of multiple threads and cores, while FreeBSD has required many years for this, a time during it has become much less used than before, because new users were choosing Linux and some of the old users were also switching to Linux for their new computers that were not supported by FreeBSD.

Eventually FreeBSD has become decent again from the PoV of performance, but it has never been again in a top position and it lacks native device drivers for many of the hardware devices that are supported by Linux, due to much fewer developers able to do the necessary reverse engineering work or the porting work for the case when some company provides Linux device drivers for their hardware.

For the last 3 decades, I have been using continuously both FreeBSD and Linux. I use Linux on my desktop PCs and laptops, and in some computational servers where I need software support not available for FreeBSD, e.g. NVIDIA CUDA (NVIDIA provides FreeBSD device drivers for graphic applications, but not CUDA). I continue to use FreeBSD for many servers that implement various kinds of networking or storage functions, due to exceptional reliability and simplicity of management.

The FreeBSD threading was perhaps behind but in general, but the big things in Linux VS FreeBSD was always the 4.3 licensing lawsuits that gave Linux a momentum that BSD never caught up with.

The real difference during that early 00s was that momentum bought 2 things that made FreeBSD a worse choice (and made even more people end up using Linux):

1: "commercial" support for Linux, firstly hardware like you mentioned, but in the way that you could buy a server with some Linux variant installed and you knew that it'd run, unless you're an CTO you're probably not risking even trying out FreeBSD on a fresh machine if time isn't abundant.

Also software like Java servers comes to mind, came with binaries or was otherwise easy to get running on Linux, and even with FreeBSD's Linux layer VM's things like JVM and CLR often relied on subtle details that makes it incompatible with the Linux layer (tried running .NET a year or two ago, ran into random crashes).

2: a lot of "fresh" Linux developers had a heavy "works on my machine" mentality, being reliant on Linux semantics, paths or libraries in makefiles (or dependencies on things like systemd)

Sure there is often upstream patches (eventually) or patches in FreeBSD ports, those last are good for stable systems, but a PITA in the long run since stuff doesn't get upstreamed properly and you're often stuck when there is a major release and need to figure out how to patch a new version yourself.