How would 2 work? I make some hardware, but have to hope that someone else will start a company to create a driver for it?
The only change is that driver development is allowed to be a competitive market.
Nothing about the situation you described is any different in the status quo.
Why not? Someone makes a faster driver, another makes say a more power efficient one so the card is quieter. And yes it vould cost money. You could compete on this thing. Once upon a time there were competing commercial operation systems. Can't see why GPU drivers couldn't compete.
The only difference is that driver devs aren't working exclusively for the manufacturer.
If you want an example of third-party driver development, just take one look at Linux.