It is limited to ... well ... Firefox! Sometimes you need passwords elsewhere. Besides that Firefox (or other browser password managers) doesn't support more advanced use cases like shared vaults.

If you only need to manage online passwords, only use Firefox, and aren't using an iOS device, then it's probably fine. But most people may also need to use native apps, other browsers, and iOS devices.

You can absolutely access firefox passwords from any iOS app. You can even configure it as the default password app.