I think you're right that Amazon has come to dominate a lot of markets on merit. But it's still the case that having overly dominant players in a market is bad for... well everyone except the dominant player. It doesn't matter why or how it came to be.
This is not universally true. It's bad if the dominant player uses their dominance to deliver sub-par quality at high prices. But so far Amazon doesn't seem to be doing that, at least in my user experience of it.
It is bad that they might one day be able to parlay their dominance into harming consumers, but the dominance itself is not necessarily a bad thing, IMO.
I completely disagree, the quality of products on Amazon has gone downhill over the past 5 years. You may attribute this to influx of bad merchants but it really comes down to Amazon not having the same incentives to properly rank items and remove bad actors. Instead it created Amazon Basics brand and steers users towards it. The influx of misc brand names and items that look exactly like each other just helps confuse consumers and make them lean towards Amazon Basics.
