Forty years ago, Richard Stallman announced the plan to develop the GNU operating system, which would be entirely composed of free software. The existence of a free operating system would enable people to operate their computers in freedom, throwing off the power of the developers of nonfree software. The GNU Project has also built the global free software movement.
There's no need for that, we're all on the same side, and the GNU tools may not be an os by themselves, but they are a crucial part of any Linux distribution.
Are we? I personally consider RMS a lunatic who's salty that no one considers his set of tools an operating system. Don't get me wrong, they did a lot of good, but every time they mention that GNU is an OS I cringe a little inside.
I would dispute that the kernel is "the most important part of an OS." It certainly is an important part - but it does nothing by itself, and a user cannot do anything with it.
Anyway, the reason Hurd isn't a priority anymore is because we have Linux (well, more specifically, Linux-libre). There's no need to reinvent something that is already available in the free software world.