Lets be frank, the main reason is that only like 1% of the market has an articulated preference towards free software and privacy. No money to be made equals no product in our cruel world. And of course FOSS, even if it is free to a user (as in you do not have to pay to use it. You do need to spend your time and resources to learn it though, and that is not free already), is by no means free to develop. The time spent on it by devs has to be compensated somehow, enthusiasm is unfortunately not the only fuel our bodies need. And then, for phones, the hardware required is not free as well. And then we need a manufacturer, who would be much more interested in making a billion Android phones than a million of a niche product.
Does Google actively try to stop development of the alternatives? Unlikely, because they don’t have to. They do not make it easier of course, why would they. And they do buy out everything they can, because they can use it to improve their products.
I do not see a good way out of this loop for now. Do you?
It may not be too bad for users: a lot of people are simply always logged on, so they’ll not see any difference. What is the current share of Chrome?