> So, basically, competition is bad for US models?

Having less of a lead is bad for US frontier labs.

> That argument doesn't address open-weights.

Open weights does far more to further that goal than closed weights ever could. The bit right before the sentence you quoted was about enabling further R&D using open models as a starting point. In the same way that open weights serves as a force multiplier when it comes to flooding the market with cheap inference it also serves as a force multiplier if your goal is the raise the R&D floor. In this scenario a reasonable move for a capable opponent that's lagging behind is to attempt to raise the floor of the whole market so as to erode the position of whoever is in the lead.

Also consider that (as I previously mentioned) raising the capabilities of the global market as a whole serves to minimize damage in a worst case scenario. If you find yourself needing to depend on a foreign supplier for a key technology then it's better to have as many choices as possible from as many different jurisdictions as possible.