Also - it forms a cartel.

Detection of watermarking requires access to the watermarking key, a secret in the current suggested scheme (leaking it would amount to being able to strip the watermark).

So, there will need to be a watermark checking service. The checking service will of course be rate-limited for common folk (and model distillers). OpenAI/Anthropic/Google/other privileged model builders need to filter out AI slop at scale, so need access to others' service without rate-limits (or the watermarking keys need to be shared).

This creates an in-group with pristine datasets, and an outgroup whose models will collapse on the slop outputs with no good ability to filter.