Canonical only having snap releases was harmful to adoption. I liked using lxd, but uninstalled snapd (forgetting lxd used it), and my vms obviously stopped. Snap wouldn't reinstall properly (various inscrutable errors), so I moved it all over to libvirt. I'd still be happily using lxd if it weren't for Canonical's snap-pushing. That's my anecdote of one.
It doesn't. The LXD team does make and support the snap, but LXD itself doesn't depend on it at all.
The majority of LXD users are actually on ChromeOS which is Gentoo based and uses a LXD ebuild package. Debian has a native .deb package too, so does ArchLinux, Alpine, OpenSUSE and a few others.
LXD however does need some special code to handle being run as a snap, that part can become a bit annoying to account for and test at times.
It is used for Crostini. Specifically, ChromeOS uses corssvm to run a virtual machine in which it runs LXD and then creates containers inside of that VM through it.
Google has sent the occasional bugfix, usually for pretty complex issues (hard to hit race and the like) but weren't involved in project maintenance or even very actively talking to us. We'd usually bump into the Crostini folks at conferences once or twice a year and just talk over dinner.
