The trillion-dollar company is often less able to produce quality products than a small shop, because of bureaucracy and hubris and dead weight.
So while I agree that the business case for web apps incentivizes mediocrity, there is still plenty of hope for everyone else. If your startup has a really great web app with awesome UX, you will have a pretty big advantage.
True, but not so fast: small shops are also constantly trying to copy the bureaucracy, the hubris and dead weight. Eventually I expect all of them to get there.
So while I agree that the business case for web apps incentivizes mediocrity, there is still plenty of hope for everyone else. If your startup has a really great web app with awesome UX, you will have a pretty big advantage.