given the feedback loop of social networks there wasn't much of a reason for viable competitors to emerge in the first place.

The lack of competitors here is structural, not everything is an issue of 'we must remove the red tape!' That would do nothing because nobody is voluntarily going to switch away from an established social network monopolist. It's a nash equilibrium of sorts.

People keep saying that...yet FB succeeded with MySpace in the market.

Same with Instagram, WhatsApp and Snapchat.

Myspace was pretty much dead the moment facebook arrived. It's true that companies like Facebook can be replaced, but they almost never coexist or directly compete. Chat services usually split geographically. Wechat in China, Whatsapp outside of the US, snapchat in the US.

Anecdotally I know very few people who simultaneously use multiple messenger apps or switch around a lot. (For the reason outlined in the post before, you lose your network).

Anecdotally I know a lot of people who use IG, FB, WhatsApp and Snapchat along side just fine though.

Lets use some math to answer this:

2 billion Smartphones users 2 billion Facebook users (Smartphone mostly) 1 billion Instagram users (Smartphone only) 1 billion WhatsApp users (Smartphone mostly)

So just looking at these numbers there must be a huge overlap in usage