This is a perfect example of competition in microeconomics. If you've only been exposed to an introductory economics, you've missed out on a lot.

This type of situation sounds like an amalgamation of a few exam questions from my first year of an econ PhD. "Cheap talk in a Bertrand market with entry costs and capacity constraints" or something. No I haven't worked it out but my intuition is that it would predict exactly what was observed: the threat of a new entrant with enough capacity risks loosing your entire business so you invest to expand your capacity to prevent that entry.

> with the notable exception of people with lots of capital to wipe the competition out of the market then do a rug pull after the fact

They used to be called robber barons.

This is provably not true. You can look at computers (besides Apple), cell phones (besides Apple), TVs, any commodity item, etc

As Peter Theil literally said, "Competition is for losers."