You're making a logical leap that this is because of firing people.
Other small factors might include, for example, billions of dollars of U.S. government funding in high tech research, sustained over many decades, the fruits of which are directly transferred to Silicon Valley companies to bring to market.
Incidentally, lots of that core research happens in the academic sector where the tenure system is common. Which makes firing really hard.
I also disagree with your assessment of our academic sector, which at the institutions that are leaders in research, is as cutthroat and competitive as anywhere in industry... actually, much more so.
You make it seem like tenure is the same thing as European employment protections, which couldn't be further from reality. At the research universities you are talking about, it is very hard to get hired, easy to get fired, and once there, tenure is only granted after years of high stress, intense work, and proven success.
Some govt research is directly given to a particular valley company and no one else, but quite a lot of it is published and free for anyone in the world to use.
As for the tenure system, firing is hard and as a result getting hired is also extremely hard.
The claim wasn't that SV tech is successful because hiring is easy. The tenure system shows that easy firing isn't essential to successful tech innovation.
We have a very individualistic culture in America. It has its positives and negatives. But most of the people here (software developers in America) have greatly benefited from that culture - we have a tremendous amount of opportunity in a field we enjoy and do very well financially. So we have no reason to complain. Even when we are fired most of us will find another job quickly that is still several times the median Western wage.
I would say the results speak volumes as well. We are the center of the startup world and our big tech companies disproportionately dominate world markets.
But there's one thing that I imagine has to be universal, which makes me wonder how much industry experience you've had. I think almost all of us have had the experience of working with someone who is a drag on their team. A bad developer does not result in 0 productivity, but huge productivity losses for the team. Sometimes people do just not work out, although maybe in Europe instead of firing them you rubber room them.