> 4. But if demand goes down, we'll have much more supply than demand, leading to a cutthroat price competition, which could prevent the factory costs from ever being recouped.

Why not normalize that, if things don't work out, the government steps in, buys the business, and offers a better regulated version of the business?

Capitalism is generally touted as useful for innovation; but haven't we paid collectively for the initial investment for many businesses many times over now that there's little innovation done? By definition there's no innovation once the only thing happening in a business sector is consolidation.

So, I'd conclude that capitalism isn't useful to us at that point, and actually harmfully inefficient (too costly for consumers), so we'd be wise to do away with it by that point in favor of a more efficiently run operational/economic system... That would actually be innovative! What that system looks like, I'm not sure, but I imagine it's something like a cooperative.

No 4 is why nobody is willing to really move on new fascilities.

China is doing it but that was for merely creating tech independence.