Because lower prices with closed weights would be severely compute constrained which would tightly cap the damage to american firms. As it is there's a plethora of providers (many of them american) serving up the cheap open weight models. Even tightly regulated industries with security concerns can use the latest deepseek.

It also enables further R&D using the open models as a starting point. That doesn't benefit china directly but it does serve to further undermine the lead that the american frontier labs have which limits their future ability to cut geopolitical adversaries off. In that sense it provides a long term hedge by minimizing the damage in the worst case scenario where china ends up suffering a crushing defeat in the AI race for whatever reason.