The explicit accusation, AFAICT, is that eInk holds certain patent(s) which cannot be avoided if you want to produce an electrophoretic-technology display panel yourself; and so people believe eInk are, through these patents, “strangling the market for innovation.”
They believe that, without those patents (or if those patents were instead in the public domain), companies that produce traditional display panels (like yours!) would be competitively iterating on electrophoretic display-panel technology in the process of manufacturing their own to sell into the market (either vertically-integrated, or as panel wholesalers), the same way they competitively iterate on LCD and LED-based display panel technologies; and that this would presumably produce market efficiencies that aren’t currently there.
There could also be vertically-integrated niche panel+display companies focusing on niche use-cases, targeting a given vertical and doing “market education” for that vertical, creating demand for e.g. electrophoretic billboards, that isn’t currently there, “inventing the market” for themselves where each of these niches can eventually be a high-volume product of its own.
And that would in turn drive additional innovation, as each of these companies would have a healthy margin to plow back into R&D.
I think the intuitional belief behind this is that the blocking factor from this virtuous cycle beginning, is the fact that the entrepreneurs considering starting these niche companies, and the display bigcorps considering getting into this space, both consider that — when per-device patent licensing costs are included — the market is too low-margin to bother entering, even to chase a greenfield vertical. It only becomes “worth it” without the licensing fees.
People’s intuition for this probably leans on analogies like the market for CPU innovation heating up again now that Apple has got away from relying on Intel and is producing their own CPUs. People would intuit that if display manufacturers could “get away from eInk” and “produce their own electrophoretic panels”, the “low energy use, readable-in-daylight panel” market would “heat up.”