My thoughts are similar. It’s possible to make high quality, kinda-native-feeling PWAs, but that definitely doesn’t come for “free”. In fact it takes a level of attention to detail and craftsmanship that frankly few developers seem willing or capable of, whether that’s due to indifference on behalf of the developer or management riding their ass pushing them to ship sooner.

So the most likely outcome is that the average PWA would be less pleasant to use than the average app, which is a pretty clear cut loss for users.

A lot of users won't install a native app but will use your web app.

From a user POV: Installing a native app is a decision. The native app capabilities let it do shady stuff with ads and exfiltrating your PII, might eat your battery, spam you with with notifications, and in case you forget to uninstall an annoying app it's a fail-open situation where it can keep on doing all this stuff in the background unless some day you remember to uninstall it. Browser ad blockers don't work on them. The app only works on your phone and with someprobability a web version doesn't exist, so it's a piece of tech that is inaccessible using a real computer, with a real screen and keyboard etc.