> But on the other hand, should bureaucrats get some sort of celestial "dibs" on certain orbits?
Yes.
> In the absence of some other kind of governing body, this is pretty much governed by the law of the jungle.
No, we have space treaties.
> Would you have the same objection if SpaceX had this issue with another company, or are you granting europe some kind of deference because of government?
Obviously, that is not in question, it just happens to be ESA this time, it could be NASA then next, or the ISS. Stuff that was already there was not put there with the likes of SpaceX in mind and therefore it is up to the newcomer to accommodate the incumbents. Satellite reaction mass is a severely limited resource.