Yes, there is a difference in markets and yes, the height of the barrier of entry makes a big difference in how fast consolidation happens. Yes, regulation can heighten the barrier of entry (but also lower, although less common).
You see instances, moments in time, and conclude that the systems don't evolve in a certain direction. I say that 'Big HVAC' will in the future outcompete all the small shops; that it hasn't happened yet says nothing. You said "a smart technician can buy a van, print some flyers, and steal their customers", but this is only true if they can do so more cost-effectively. Your example leans on the consolidated company doing their job terribly, rather than more efficiently than the small shops. It is true that a low barrier of entry reduces the leeway such a consolidated company has in treating their customers badly, but it is not a guarantee. People regularly do choose the big boys over smaller outfits for a variety of reasons (liability, chance of warranty, etc.).
> By your logic, the world would have stopped at Sears, Blockbuster, and IBM. Yet, the first two aren't even a thing in 2026 and I don't want to comment on the IBM of 2026.
You're naming companies in industries that have become even more consolidated than when those companies were the behemoths. Don't you see that "some big player existing" isn't a stable end state? I never said that being big guarantees survival. Big fish can be eaten by even bigger fish. Yes, there can be disruptors, but they very quickly gobble up the entirety of the previous players to become an even bigger player. It's about market share distribution as a whole. Companies simply have a constant incentive to cooperate, merge, and consolidate to extract higher profits from customers. That never goes away by itself. That is not immoral, but it is amoral. They are behaving rationally and in their self-interest.
Think about what price-fixing, cartels and generally 'market-distortion' is. It is nothing more than cooperation for mutual benefit between companies, which is why it keeps happening over and over and over and over again. It sucks for the customers and society, but for the companies it is fully rational.
You need to seriously think about what happens if all government regulation goes away. Don't handwave it. Really think about it. And I don't mean "they'll dump toxic waste on manatees to raise profits" (they will, but that is not the point). I specifically mean anti-trust regulation and regulation that impacts the barriers of entry to markets. Think about the evolution of players in the markets and what they would do to become fitter (increase profits). Do you really, really don't see consolidation happening? You talk about Silicon Valley as being untouched, but we've had years of the main startup strategy being to work towards being bought by one of the deep-pocketed tech giants. Consolidation was the explicit goal.
I guess the best way out of this would be to have a data driven visualization of the distribution of market share among producers and its evolution through time, to see to what extent such consolidation actually happens. Somebody should vibecode that. Maybe using a frontier AI model made by a local mom and pop shop (zero barrier of entry from government regulation there! :-P).