True, I get exactly what you mean with "compete" - they could severely hurt third party managers, and thus stifle innovation without fair competition.
The Shortcut is a very clever solution, but the problem I see is that the Passwords list in settings still lacks so much. No vault organization / granular sharing controls. No secure notes, or other non-password infos that need to be secured. 1Password is $5 per month for a family of up to 5. While I find it well worth the money, the truth is that Apple could easily build a more compelling product that integrates far more seamlessly. To some extent it already does, except for a number of features (some of which I mentioned above).
A dedicated keychain.app would solve all of the problems, and since I am a 1Password paying customer, I wouldn't mind if the app was locked into iCloud+ subscription bundle. I'm sure that would get major flack, but I suppose I am just desperate for a comprehensive and integrated solution. I am fully in the Apple Ecosystem and yet the current password implementation just doesn't do it for me.