I think a few points worth making here:
- From what I can see many products are rapidly getting past "just prompt engineering the base API". So even though a lot of these things were/are primitive, I don't think it's necessarily a good bet that they will remain so. Though agree in principle - thin API wrappers will be out-competed both by cheaper thin wrappers, or products that are more sophisticated/better than thin wrappers.
- This is, oddly enough, a scenario that is way easier to navigate than the rest of the LLM industry. We know consumer apps, we know consumer apps that do relatively basic (or at least, well understood) things. Success/failure then is way less about technical prowess and more about classical factors like distribution, marketing, integrations, etc.
A good example here is the lasting success of paid email providers. Multiple vendors (MSFT, GOOG, etc.) make huge amounts of money hosting people's email, despite it being a mature product that, at the basic level, is pretty solved, and where the core product can be replicated fairly easily.
The presence of open source/commodity commercial offerings hasn't really driven the price of the service to the floor, though the commodity offerings do provide some pricing pressure.