I think you're mostly correct, but I slightly disagree on this part:
Rules, regulations and restrictions, slowly put up more and more stops for simple small people to enter the space
I think the reality is that convenience simply trumped out. As much as we can see now that allowing the internet to coalesce into a handful of silos, or often only 1-2 silos as is the case with Youtube, years ago the major value they provided was that you could simply go there and find the content. Reddit's demise reminded me of this more than anything else. I was a daily visitor for quite an array of topics for over a decade. When they decided to fully fuck up the site and I left, I found myself having to think about which of those content sources I wanted to replace and what I'd want to replace them with, and as much as it would be cool for that all to just be "lemmy" the reality is that I now am looking at far more RSS feeds, discord servers, mastodon servers, etc.
I also think that there is a phenomenon that is a bit more insidious at play, and that's that most of these services are funded by VC or these massive companies and don't make money for years or even a decade or more until they've consolidated the market to basically just them and they can charge whatever they feel like. Youtube follows this pattern. Even after Google's acquisition, it was quite a while before YouTube became even break-even as they gobbled up the market for this type of thing. VC/Google can sink billions into infrastructure without turning a profit until the market is basically just Youtube, and then all of a sudden we get Adblock crackdowns and near doubling of Premium rates. The only place that might compete with Youtube at this point is probably Apple or Amazon mostly because they're the only companies that can say "we're going to lose hundreds of millions or billions for at least a decade."
Ultimately, I think this is going to be the major lesson from about 2000-2020. As consumers, we should be extremely mistrusting of businesses where we can't understand how they make money, because usually that just means that the way they make money is to basically monopolize the market and then really fuck us.