This is fundamentally the problem isn't it. They feel entitled _because_ they can dictate terms to the rest of the web, or at least they think so. There's no fixing this by changing Google's mind, only by forcing their hand by making this decision hurt their wallet. And as you point out, that only happens if people stay outside of the Google garden.
Which is likely a big part of why MSFT tried to get rid of it.
Not sure what is the solution here. Several years ago it seemed to me that Mozilla may be on track to get their shit together, then they decided to lay off Rust/Servo people, left their Firefox for Android team barely staffed so they couldn't even handle more that handful of supported extensions and instead spent all the money on their CEO bonuses. Guess this is going to be quite a painful decade for the open Web...