Not sure this holds, sadly. I spent a few months reporting serious security bugs as model capabilities took off earlier this year, and only ~half were fixed. The unfixed bugs were just as critical as the fixed ones; sometimes they were even two similarly critical bugs at the same company, and only one would be fixed!

On your other point, the government still has systemic leverage and can compel access, so this doesn't remove that risk.

That doesn't mean this is the end of the world, and some balance of power is usually good. But I do think it will still increase the capabilties of rogue actors and their net harm.