Firefox should be able to open a text file by default, mine does.

Maybe you (or an extension) have added a specific action for text files that is no longer possible so it is defaulting to asking or offering to download.

Check any actions listed under file type .txt make a note of what it is currently then delete it.

• use Firefox Button -> Options -> | Applications |
  scroll down looking for a .txt entry, select & right click for options
• see Applications panel - Set how Firefox handles different types of files

That happens if the text file isn't send as text/plain, but with another MIME type.

See also:

• Open in Browser: https://addons.mozilla.org/firefox/addon/open-in-browser/