This is not a good diagnosis of why Tech companies have such high profit margins IMO. Software is incredibly scalable: once you build a software, you sell it to millions of people, or build a platform that's used by millions of people. Tech is building off the shift of the economy to more automation and less dependence on labor. There's also the thing where entire new markets are being created and Tech companies are the only participants (e.g. rideshare, search etc.).

In most instances reasonable regulations allow for more innovation in the economy by making it easier for smaller companies to compete with big businesses, and to make sure that businesses don't hurt the societies and economies they operate in.

While there are good instances of over regulations, much like the myth of the welfare queen, I think its much overblown, and not an accurate diagnosis for the problems businesses are facing today in America.