I've never fully understood the market failure here.

Let's assume no Monopsony. Let's assume no collusion by employers, since this is explicitly illegal, indeed it did happen, but the tech firms were slapped on the wrist for it.

Why do employees not attempt to strike out those portions of their contract? Why does no entrepreneur create a tech company with one of the innovations being a no "non-compete" clause and using that to woo employees?

My guess is that employees do not actually dislike non-complete clauses that they would accept a lower wage in compensation for no "non-compete".