People know what they want, and will vote with their wallets. As long as options are allowed to exist, you can trust a well informed public to gravitate towards the most optimal solution over time.
Sure, but in this case there's stacked incentives against people being able to vote with their wallets in the first place with ecosystem lock-in. The companies are incentivized to prevent people from being able to easily switch to a competitor, which is exactly why most people don't, and by and large the general populace isn't going to be savvy enough to recognize that's what's happening.
Like you said, the way you combat that is having a "well informed" public, but who's going to be responsible for informing the government? That's the entire point of the US FTC, is representing the interests of US consumers and paying attention to related issues.
> Governments are out of touch with what people need
Yes, governments are going to be slow and conservative w.r.t. what current public opinion is, because organizing large groups and institutions is difficult.