If the nation of Switzerland was singlehandedly dying on the hill of privacy concerns while the whole world laughed and moved on I think your take would be the correct one - but Europe is a big economy and it has an immense amount of tech talent. SoCal may still be the Mecca of technology but Europe is no slouch - by taking a stand they are opening up a market for privacy conscious applications to thrive. In the best world Europe's actions will benefit us all in the long run and we might see a big player pivot to actually meaningfully adhere to the privacy concerns - in a less good world we'll probably see a fair amount of competition by small players within the Eurozone to provide the best software solutions while also respecting privacy.

I think it's a fair criticism to fear that the data may end up in the hands of well intentioned but poorly secured applications that cause larger leaks, but we've seen huge leaks in the US even from companies that exist solely due to the value of their data (i.e. Equifax).