Manufacturer self-interest is not a law of the universe. Manufacturers do what's best for them, and not for some idealized free market. Often,they fail to do what's best for the org in the long term because they comprise humans who mostly care about the short term (bonuses, careers and such).

"If better was possible, it would already exist" can be filed under Capitalism Fantasy because it ignores all confounding factors. It also fails to explain why curremt consumer products are getting worse (for the consumer, but more profitable for the producer e.g. TVs, washing machines, fridges)