You can compete without working to convert an ecosystem from standardized to proprietary. If that happens it becomes much harder for anyone else to compete, and the end result is reduced competition.
It's much less of an issue if you make your own new thing be proprietary. It causes problems when you co-opt an existing market. It really causes problems when you're devoting external resources to conquering the market and once you do so you stop caring very much about improving any more.
