Mozilla deserves some of the blame for misleading users into thinking that Firefox is available on iOS when all they really provide is a Safari reskin.
The average user doesn't care about the underlying browser engine. Why should Mozilla add that to their advertising when no other browser maker on iOS is?
The two most popular browsers on iOS do not support ad blocking, unless there's something I'm not aware of. I've never seen an ad blocker in iOS Safari or Chrome. Firefox on iOS has tracking protection which can block some ads if you believe the description of the setting.
Not really. That's all Apple. Mozilla wants to try and provide the UI and experience and are doing so as best they can to satisfy their users requesting it.