To an extent, that buying of companies is what keeps them in business. The current model of creating a company without a long-term plan for survival turns them into a money-sink and their only hope for survival is to be bought by a company with deep-pockets who needs a loss-leader.

YouTube, WhatsApp, Reddit - all examples of services that would have disappeared or rotted away if they hadn't been swallowed up.

I am not sure why WhatApp or Reddit would disappear, don't we have so many IRC and mailing lists that are still running, you do not need a crazy amount of servers and developers to keep things running. I am not sure about YouTube, it would have survive in a fair competition, the problem is competing with giants that play in many markets is not fair

IRC and mailing lists are more pro-sumer oriented than the average app. They survive despite the app market, rather than because of it. They also aren't particularly profitable, except in limited circumstances.

Apps are more clearly aimed at the consumer, ie., people who aren't going to get into the technical details of connecting to a particular service and learning the commands.

I doubt we'd have the overwhelming plethora of services if the app market hadn't been created.

Then maybe we should let those companies go under. Someone else will come along and iterate on that idea, and given the benefit of seeing what happened before, they'll be in a better position to make themselves profitable.