> either the government makes such services, and makes them well enough to seriously compete

Europeans have already made open source versions of quite a few things as side projects without any funding. The issue is a lack of transparency (by American standards) that hides just how hideously incompetent and outrageous (even by American standards) member state governments are. (PACER is a big reason how Americans know what Europeans are ignorant about.) I do believe an EU member state could otherwise create any service that American companies already proved are desirable, make it free for nationals and residents and require payment for others, and use EUDI as the login and verification, probably for quite cheap.