They passed a regulation mandating either Micro-USB or an adapter, then decided that wasn't good enough and passed a new regulation mandating USB-C without an adapter. If USB-C didn't exist they absolutely would have mandated Micro-USB because they think they know better than tech companies. We're lucky they didn't demand computers keep serial ports in the 1990s.You can cling to Micro-USB argument (which the EU did not mandate on smartphones) and conjecture about (inhibited) development of "superior connectors" all you want...
Ridiculed is a bit harsh, but overall I agree with pretty much everything you wrote here. Still doesn't mean the government should be mandating which connector products use. Especially if you're right and Lightening was costing Apple sales. The market is perfectly capable of taking care of that on its own.👉 The inclusion of USB-C has made it a better product.
For the same reasons that Apple began to introduce it to their iPad lineup ages ago (6 years - a long time in tech).
It allows for faster charging, faster transfer speeds. And importantly, connection of peripherals with a standard connector. iPhone users - a minority of device buyers in Europe (by your own argument) - were long enough ridiculed for Apple's slower, proprietary connector, the price premium for their cables and inability to plug in...things like a normal flash drive. No one's shedding a tear for Lightning.