The problem with vertically integrated technology is that if a huge advancement appears at the lowest level of the stack that would require a whole re-implement

The problem with vertically integrated technology is that if a huge advancement appears at the lowest level of the stack that would require a whole re-implementation of the whole stack, a new startup building things from scratch can overthrown a large competitor that would need to "throw" their stack away, or evolve it without breaking backward compatibility, etc. Once you have put a lot of money into a product, it is very hard to start a new one from scratch and let the old one die.