Good for customers but not for business. Competition tends to minimize margins and profits. While main business goal is to make money, competition is against business goals.
Competition can also grow a sector, bringing in many new customers that may have otherwise dismissed an idea or might not have even heard of the idea without the exposure driven by the competition.
Many one-person businesses focus on niches and do one thing great. Often they also offer great (aka personal) support. Also, quite often, they are great in building a community around their service. Additionally, many of the solo entrepreneurs are good teachers and share what they know. All these factors together make their services (and themselves) so valuable that a competitor with a slightly better price will not take away all customers.
You're talking about acquisition channels. Community, blog or webinars are great channels, but there are also organic search, paid search, traditional advertising, native advertising, bundling, paid promotions, upselling. If the copy-cat is better at these, their product will out-sell yours.
Very few of the one-person businesses go for mass markets where you need the paid (ad) channels that you mention. Also, the "channels" I mentioned are not just for acquisition but for enduring relationships. You cannot simply buy trust, an ad will not deliver as much value as a connected and caring business owner.