I don't think anybody understand how bad it really is. Forget about Greenland. Trump can say "give me Germany or I'll shutdown Azure ID" and we will have to give him Germany. At this point we are just praying that neither him or any of his hawks realize this.
Maybe not that bad, but it does definitely give the US a major advantage diplomatically
I agree that many countries are indeed very vulnerable to this, but you somehow managed to overstate the case by some orders of magnitude.
Silicon Valley flipping the switch on a country would sure cause short-term chaos and longer-term significant inconvenience. But when push comes to shove, bureaucracy gets moved aside, creative workarounds pop up, and people make do, somehow. We've seen that happen during COVID-19 lockdowns.
And after some time, the boycotted regions will find themselves with a healthy independent software industry. Silicon Valley's global impact would be greatly reduced, because any mildly sensible country would want to reduce its exposure and some serious competition will finally get traction.
I think the hawks realize all this. Though it's of course impossible to predict what the Chaos Monkey in Chief will do.