I don't think you're wrong, but to over-simplify what you're saying: "Netflix took my $100/mo cable bill and $40/mo Blockbuster habit and turned it into a $10/mo fee. Now I'm not getting all that entertainment for the now $15.50/mo fee."
Again, you're right: before the other players came to streaming, Netflix had an amazing value proposition. Why? Because "the other players" didn't realize that streaming would displace cable, DVD purchases, and Blockbuster rentals so they licensed their content to Netflix a lot cheaper than they would have if they'd realized that. Yes, there was a golden era of Netflix before "the other players" realized that streaming was the future. Over the long run, it's logical to think that they weren't going to just want less money while you got the same quality content.
I would disagree that it's mediocre content across the streaming services. I do think Netflix has invested too much in mediocre content and that's biting them (as the article notes). However, we have so much amazing content being produced.
I also think that "across services that easily cost $100+ a month" is a bit unfair too. $15.50 Netflix, $8 Disney+, $6 Hulu, $15 HBO Max, $5 Apple TV+, Paramount+ $5. That's $55. "Oh, I don't want ads so it's $13 for Hulu and $10 for Paramount+." Fair, but it's not like cable TV was cheaper, it had practically zero content compared to these streaming services, and more than 25% of its time was ads.
I think a lot of people don't really remember how there was almost nothing to watch back then. I think people's memory of the earlier days of Netflix streaming is colored by the fact that they went from "there's nothing on TV" to "OMG, Netflix has so much to stream! This is amazing!" Part of the issue is that we've gotten really accustomed to having so much to watch available. Even if Netflix were giving us just as much quality as they were when they were a "good value", people's perception of what is a good value has changed.
Netflix is still way better than cable in most ways (live sports being a big exception). It's also way cheaper. But it's also not unique anymore. When Netflix launched (and for many years after), we were all thrilled that we could watch 20-25% of the content we wanted via this one service. That was amazing. However, I think our expectations have changed: we think we should have access to all the content we want - and for cheap.
For ages, people complained "why do I have to pay for a cable package that includes X which I don't watch! I should be able to select services a-la-carte!" Now that we're offering services a-la-carte, it's becoming clear that the real complaint was that people just wanted to pay less money for the same content.
I think that Netflix launched and was such a huge jump from the old experience of cable TV and people expected that $10-15 to keep jumping from 20% to 40% to 70% to 90% of what they wanted to watch for one low price. I do think Netflix has had missteps along the way including pouring money into a lot of stuff that ends up being background noise rather than great television. However, with others entering streaming, they were going to keep their own shows for their services more often than not and there would be more competition for high-quality content. Disney explicitly went after Star Wars and Marvel to build a content portfolio they could leverage and bought Fox and its huge library of TV and movie productions (both the historical library and ongoing) as well as Hulu (pending them buying out Comcast's 33% which they're entitled to do).
I guess I wonder: if you could go back in time (knowing what you know now) and take control of Reed Hastings, what would you do differently (with the caveat that you do need to create a business that will make money)? My suggestions would be things like: don't keep throwing money at low-quality content that people "watch" but don't really watch. Just because you can measure streaming hours of a program doesn't mean that people like it. I might suggest buying a content company, but that seems like it would be a hard thing to do. It'd give them owner-economics over a large back catalogue, but even in 2016 Netflix was a $40-70B company. Who could you buy without giving away half (or almost all) of your company? 2016 you're talking $40B for Viacom without CBS. Disney would be $150B+. In 2016, AT&T made its deal for Time Warner for $85B. Disney bought Fox for $71B in 2017 - minus the US stations and Sky. If you go before 2016, Netflix is a $25-30B company in 2014 and a $5B company in 2012. They don't have the money. Do you try to negotiate even longer-term third-party content deals for streaming in 2007-2010 before third-parties realize that you're going to be cannibalizing their business? Get Time Warner to give you their catalogue for a 20-year run - giving you a very long time before they can compete with HBO streaming? Do the same to others?
To me, the big misstep seems to be that Netflix invested too much in low-quality filler that shows up as "viewing hours", but isn't quality viewing hours that keep customers loving your product. It's more like settling hours. Beyond that, I think a lot of it is just that people want access to everything for less money and realistically that wasn't going to happen. But maybe you have other ways they could have gone - without saying "keep spending more money, keep losing it, die a hero."