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the more portable everyone is, the more arbitrage will happen - cheap providers will raise prices too because users will flow to them

This is not a theory of market competition that I've heard before.

It’s also an usual use of the term arbitrage

you will not want 20 different accounts at 20 providers, you'll have one at a "token arbitrage" provider - OpenRouter

drop-shipping is a form of arbitrage

basic supply/demand

demand moves to cheaper providers, they ran out of capacity and increase price

literally why "commodities" are "commodities" - the more interchangeable a product is the more exposed it is to supply/demand mechanics

Agree. The less "stuck" a customer is to a given provider, the more that prices should equalize between providers.