Who ever said competition produces what is good for the consumer? It produces what the consumer wants. If the consumer wants to shoot himself in the foot, it delivers a neat kit consisting of a gun and shoes with a target painted on them. Who ever promised more than this?
This is really similar to AI design. The core issue is those consumers wanting different things than the author. Blaming competition is simply a trick, a misdirection. Essentially the author is saying it is too bad the firms deliver what the customers want and not the author.
"I looked at what I think of as the food chain that led to the financial crisis, which was that you had individual consumers buying houses they couldn't afford, sold to them by realtors and property people who were competing to sell more properties at a higher price and so on. [...] I thought, hang on a second, classic economy theory tells you that a competitive marketplace is superior because competition provides a diversity of products which is good for the consumer, and it also, therefore diversifies risk. And yet, in this instance, competition has led every single one of these companies to copy each other, which had concentrated the risk. And I thought, Wow, that's interesting. That's specifically what's not supposed to happen."
More here.