I may not be well informed, so feel free to cite sources that prove me wrong, but I'm not 100% convinced about the co-ops being equally competitive or that they'll be just as profit-seeking.

Yes, individuals outside of sociopathic executives are also driven by profit, but they're also more influenced by other factors. For example, most non-executives might opt for a more ethical solution over a more profitable solution. This may also carry over to efficiency: maybe a co-op could opt for a more efficient, if less profitable, solution in order to keep prices low. There are several incentives for this: long-term growth, social good of making things more affordable, personal pride in being the lowest price, general lack of desire to optimize for a single metric (profit). Now, these are all guesses. I don't know of any good studies about co-op behaviors in aggregate versus traditional corporations, but this sounds feasible to me.

All that said, it sounds like you're better read on this than I am, so I'd love to learn if you can throw some sources at me