That's a standard free-market, laissez-faire take on things, but not entirely accurate. The usual IT factors of lock-in, path dependency and network effects have their place. As does the frequently underestimated, yet monumental task of getting effective interoperation even when all parties are willing and able to do so (neither of which is generally the case).

Minor browser engines such as Webkit, Gecko and Opera can't change the market much on their own. They need to be interoperable to some degree for people to start using their additions to the standards on the wider web. HTML5 (nee WHAT-WG) was initially those browser vendors coming together to work on exactly that.

You give Canvas as an implementation before standardization example, yet it was far more iterative than that with Apple's original implementation (for use in the walled garden of their widgets) being presented for standardization with the explicit idea that it was good for Apple if there were interoperable implementations out there.

It's a pretty good example of Co-opetition. (http://en.wikipedia.org/wiki/Coopetition)