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Used to be that Google offered applications and services that rivaled or surpassed the established pay-for alternatives. Now... FOSS is the new Google, Google is the new Microsoft, and Microsoft is innovating a whole new category of shitty and ubiquitous slopware.
Nah, FOSS isn't the new google.
It's a normal part of a market cycle that a cheeky upstart, a disruptor, will enter with less inertia and a fresh approach. Inevitably they become the incumbent with the same problems as those they displaced.
I think FOSS holds the same position it always has - low cost, generally low "perceived" quality. However, as the higher perceived quality brands become hostile to users regarding privacy and features like AI, that perception of quality around FOSS is changing, but not to an extent that's significant in the market.
What I mean is, FOSS has become an appealing option to you and I because we care about privacy. In general though FOSS is in the same position it always has been.