Is this actually an issue? The earth has a surface area of 500M km^2 so if want 0.5km between each satellite you can fit 500M satellites at one orbit level. A few thousand spacex satellites is a drop in the bucket.
All great circles on a sphere will intersect in two places, which assures a collision if you have satellites in them both (without active avoidance). So you have to separate the great circles on to different sized spheres, or add a little eccentricity to make sure the rings don't touch.
There is still a lot of space, but comparing to the size of the surface of the earth is not very informative when dealing with orbital dynamics.
It's not useful to make a simplifying assumption, if the solution to the problem is to reverse the resulting simplifications.
What I was trying to do was show how we move from the mental model of dots on a balloon (there is so much space on the balloon! the dots are tiny!) to rings around a ball. In order to make sure the dots don't intersect with each other simply spread them out appropriately. In order to make sure the rings don't intersect each other make some of them slightly bigger, or stretch them a bit.
The resulting orbits are still, approximately, great circles on the same sphere - just perturbed a bit.
https://medium.com/@leolabs_space/the-iras-ggse-4-close-appr...
https://spacenews.com/esa-spacecraft-dodges-potential-collis...
Add in thousands of new satellites from various race-to-the-bottom move-fast-and-break-things companies and Kessler syndrome seems less hypothetical and more inevitable.
"a bug in our on-call paging system prevented the Starlink operator from seeing the follow on correspondence on this probability increase"
Imagine if the other satellite operator had been similarly negligent, or if the satellite had been defunct. It will be somewhat ironic if a Musk-led operation grounds humanity on Earth for a decade or more.
Useful in both communication and in denying the space to other classes of satellites.