hg could be 20% better than git. For the sake of the arugment, let's say it is. git's network effects mean hg needs to be 1000% better than git to replace it (much like git replaced svn, svn replaced cvs, and cvs replaced rcs).
There are tons of companies using mercurial including some of the biggest ones. It's not really accurate to imply that Git won and Mercurial is dead.
I still have to understand how CPython could miss the symbolic meaning of this decision.