1. There are plenty of privacy-focused and self-hosted web analytics packages. Their adoption is widespread in EU online publishers and is growing in the US.
2. This has to do with specific implementation of Google Analytics, wherein psuedo-PII is collected without appropriate disclosure and consent, and may be considered sale of data if the option to pass data to other Google services is selected. A vanilla installation of GA without opting into information sharing or passing custom parameters generally is GDPR compliant and falls under the Measurement (Purpose 4) category of cookie consent.
3. The European internet for publishers is noisy with consent banners, but continues to monetize and thrive. Advertisers haven't pulled out en masse and audiences still consume content. Ad targeting is harder, but the old ways of matching ads to content remain viable, along with other techniques.