A company making an integrated experience would inevitably provide a better experience/performance than a company asked to build for 100s of devices with different spec. That Apple did not want to open it up is a separate discussion.

My contention is this: expecting a third party provider to be able to provide the same experience as the first party is an impractical goal. Even pushing companies towards that means a lot of second order effects where everyone ends up like Intel or Windows for that matter. We already have android on that level.

You can have a reasonable requirement where Apple should not be able to block other companies from providing similar services based on an iphone. But clearly the directive here is that Apple's competing products should not be better based on better integration, which can only go in one direction. Apple degrades its own products to comply. Yes, competition wins, but consumers lose. In this case specifically - consumers who would want to choose Apple, better experiences would not be able to simply because Apple cannot ensure the level of software/hardware alignment as it works today if the same software is written with modular hardware in mind.