If installing alternative/third-party firmware becomes easy and normalized, there will also be more options to choose from, because it will actually become worthwhile for people/companies to develop said firmware.
I believe if given the tools, people would gladly donate their time to make something fun with it. Heck, that's what I do in my spare time. But it's impossible if everything is completely locked down, as if a music streaming box contains nuclear launch codes that must be protected at all costs.
If you have an easy way to flash any phone and plenty of firmware available, it makes sense to turn flashing into a business. Buy used phones off people who don't need them any more, reflash them with a newer and debloated Android, and then sell them off for more than you got them for.
This would very quickly lead to abuses though. If PC OEMs are bad, imagine what a small mom-and-pop shop, subject to a lot less scrutiny and having much less respect for the law could do.
Well no, because not all e-waste are devices that you can conceivably reflash. For instance a monitor equals at least 10 phones in terms of e-waste volume, but I doubt legislation like this is going to make a dent in monitor e-waste. The proposal only realistically makes a difference for computing devices with short EOL periods and locked bootloaders, so basically phones and tablets.