The argument is that if no one chooses the underdogs, then eventually there'll be a monopoly and no choice, regardless of switching costs..

I think he's saying, if no one chooses the underdogs, the overdog (e.g. Amazon) will have a monopoly and can (and will) take advantage of the high switching costs to gouge their customers.

the company with the smaller market share cannot make moves so easily because can't afford to lose customers and even more market share, so it will be the nicer guy probably