Valuable, dear, beloved users for which the business has boundless sympathy, empathy, and compassion are now awkwardly the source of compliance concerns for which the costs outstrip the reasonably expected revenues enabled by compliance. While compassion is unlimited, it is possible the budgets and time may not be.
Better?
The GDPR is not about revenue but about privacy. It's not meant to be cost neutral. Bank robbers could also quote you to complain about the burden of anti-robbery laws.
However, is it possible that in a context where companies are weighing the cost of GDPR compliance against the benefits of GDPR compliance (i.e., keeping their EU business) some might come down on the side of jettisoning the EU business? They might even opt to do it by using a tool, like Cloudflare Workers, that they can convince to block everyone in the EU.
You would be absolutely, completely, 100% right to consider this fully in line with the intentions of GDPR. Protect privacy or GTFO, right?
With that said, it's possible that a fragmented market with fewer legal business models may not be as conducive an environment to all possible businesses. It's even possible that as a result, not all gaps will get filled.
Different legal models also provide grounds for experimentation. Who knows what works better in the long run? Wild West or regulation like GDPR? We don't know.
Which is to say that you could be right! Absolutely and completely! Or you could be really wrong. Time will tell. The economic history of protectionism could be read by some to provide some clues, though.