Could we be at the very beginning of a Cambrian explosion for space exploration? Exciting times.
Most of those smallsat companies are financially viable on the expectation that they capture a meaningful fraction of the smallsat market - like 1/5th or more. They can't all win - and that's assuming any of them win. SpaceX seems to be planning to own the rideshare market [0], and so unless a customer really cares about having a particular orbit that's going to be pretty tough competition.
The dotcom bubble was the start of a cambrian explosion.
Those two events are part of the same process, not wholly separate entities in which case one is bad and the other is good. They require eachother and cannot be unlinked. The dotcom bubble was not a bad thing, it was a necessary process of chaotic, sometimes idiotic, experimentation. It was an extraordinary good. The total sum of all capital destroyed during the dotcom bubble (which lasted less than four years) would fit into a corner of Amazon's present market value.
Unless you want to pretend that humans are all-knowing gods. In which case we require no experimentation, there are no foolish mistakes possible, no errors of judgment possible, no irrationalism or over-excitement is possible, no emotion is possible, no idiots and malevolent actors (eg con-artists) are possible. And so on.
We should all be hopeful - giddy in fact - if we're about to see a space-focused dotcom style bubble. Bring on the space bubble, do it right now, let's get moving with that. That will be truly extraordinary, it will signal what comes after: a real, massive, sustainable expansion.
The global Internet is beyond a magnitude more valuable - in every way you can measure it, whether in business transacted, value of tech companies, or how valuable it is to end users - today than it was at the peak of the dotcom bubble in 2000.
Most of the funding raised by smallsat and small launch companies is a rounding error compared to the amount of money tossed at bullshit companies useless crap.
And there are lots of companies doing this! Two looking at 100+ constellations local to me, and I'm in Adelaide, Australia.
It's possible that the bubble is in the companies and the rocket companies are spades. Or maybe there is no bubble and this is airmail and airplanes.
While I agree with your general point, do we completely understand the opportunity that space launch/travel/exploration provides yet?
The opportunity may be exponentially bigger than we currently understand.
SpaceX's rate for an Electron-sized payload is 1/6 the price of an Electron.
Both nanosatellite and small launcher companies are booming hard in the last few years.
On a wider note, I find the dramatic pessimism of our times rather unfortunate. It seems every technical advance is now met with some prediction of doom. I miss when technical forums were optimistic.
It is possible for small fragments to potentially be moved to higher orbits (with counter balancing mass being moved lower) But the conservation of momentum prevents the vast majority of fragments from suffering this fate.
Baring exceptionally bad luck a collision in LEO would usually decrease the time before the orbit decays. Remember a debris field has more surface area than an intact satellite.