It would indeed be a more expensive grid for everyone. However customers tend to pick which ever producer has the cheapest sticker price and a large number will

It would indeed be a more expensive grid for everyone. However customers tend to pick which ever producer has the cheapest sticker price and a large number will not consider the cost associated with potential blackouts when going into contract. Those situations tend to result in a rush to the bottom if there is no other forces involved in the market. In a market where the government guaranties stability people think they are paying for the kw/h, not power when they need it. It only if they are somehow forced to to consider "power then they need it" that they consider such thing when deciding which power company is cheapest. Which returns back to investments. If consumers will reward companies based on the cost of kw/h, and they will assume that governments take care of balancing the grid, then companies that invest in technology that produce the cheapest kw/h and ignore grid stability. The only way out would be for governments to subsidize less economical ventures but which consider grid stability.