To me, the fire is one of the strangest details of the incident. It was the only thing they could have saved them. I absolutely agree with the birch bark, also birch wood is ideal as it burns even if wet. Green cedar and spruce branches are good as well, because the green needles contain resin and burn really well (but quickly). Also, based on Grigoriev's diary, there was a lot of dangling moss/lichen growing on cedar (and probably on other trees too), which is ideal for starting a fire as it burns exceptionally well.
What is difficult to understand is that the fire was not right next to the cedar tree trunk which would protect if from wind (if the wind was strong there). There was enough people for maintaining the fire, collecting the firewood and protecting the fire from wind. They had all means to make a really big fire, but they did not do it.. Something is missing here. Maybe they were not collaborating, arguing among themselves about what to do, or there is also a possibility that the group was split on the slope and both Juris were the only ones making the fire.