There are many of us who regard the AGPL as a nonfree license. It’s just the FSF zealots who regard the ability to run a services business with free software as a “loophole”.
Nothing is stopping anyone from setting up a competing service and charging for it. The only thing they can't do is provide their _modified_ version as a service without providing the source code. Which is just the GPL's usual distribution clause updated for how modern software is distributed. Bear in mind that said source code could literally be a zip file that is emailed when someone requests; there's no requirement to post it publicly on an ongoing basis.
I don't consider myself a FSF zealot; far from it in fact. Most of my software to date has been permissively licensed. The difference in this particular case is I'm not just building a tool or a library, I'm building out a complete product and putting a LOT of my hard-earned time and energy into it. Enough that I want to actually put in writing that any modifications should also be open-sourced.