The reason Mozilla sees themselves in danger is due to Chrome. It's possible that due to Google pushing their own browser, they may not see any incentive to continue funding Firefox development. If Chrome usage rises to significant levels, Google may want to redirect their resources, after their three year contract with Mozilla expires in 2011. The search giant hasn't commented on any plans they have, though there's still a substantial benefit in working with Mozilla. After all, Chrome has yet to really take off and Firefox has a very large market share to play with.
The bottom line, as I see it, is that Firefox was not born with Google in mind and the browser will certainly not disappear should Mozilla suffer a massive revenue loss. A change in business, for sure, and it is also possible that development would be affected. Google may be king of search, but there are still other players, such as Microsoft and Yahoo – and there's nothing preventing Mozilla from working with them as well.