TSMC being the only game in town is what's bad for the market.
In the macro sense there seems to be more widespread awareness and money going towards fab competition than ever before. I suspect we'll trend closer to performance parity between competitors in the coming years.
Nobody will be able to compete against Apple CPUs while they're 1 process node ahead of competitors though.
I recently moved to Linux from MacOS, but probably will have to go back to Apple on the m4 for local LLM capabilities (high RAM specs much cheaper than commercial GPUs). Too bad Asahi is still missing some pretty critical capabilities (microphone, USB-C monitor connection etc)
If this artificial advantage allows Apple to slack off in their other areas of competitive advantage, then this is bad for the consumer, overall. This creates an environment of cynicism, where there's even degraded incentive to try and beat Apple with a better product.
Beyond some threshold, any meta-gaming of the market is bad for the market. It's like patents. When they were first instituted, they did some good by incentivizing innovation. Then, people started meta-gaming them, and used them as legal weapons to suppress competition well beyond the original intention.
I don't think there's a good argument that monopolizing a feature is good for the market, even if the means that allows it is technically legal.
What could be argued, is if legal remedies to this kind of meta-gaming might also be meta-gamed in return and become worse than the thing they were trying to remedy. This seems to always happen in a variety of forms.