I'm not sure what the downsides are here...

It's like they don't realise they're the whole reason for the sanctions

From a competition standpoint it'd be best if ASML wasn't a monopoly. Ideally though the competition would come from a state that is genuinely democratic, at least not authoritarian. Interesting to consider in the context of https://en.wikipedia.org/wiki/Chip_War:_The_Fight_for_the_World%27s_Most_Critical_Technology but yes it's obviously both an economical and political challenge.

Overall if democracies try to use this monopoly as a political tool and yet they don't themselves have enough capability to allocate the output from the sanctions then it can only be a short term solution, otherwise they risk hurting such a powerful bottleneck.

PS: I have ASML stocks so economically speaking I'd prefer if sanctions wouldn't hurt their bottom line. Yet, if their sales comes from actors that are belligerent to other nations, e.g Taiwan for the 1 China program resulting in its "silicon shield", then I'm fine with a loss. ASML has as a corporation to maximize its return on investment but... somehow being ignorant of the geopolitical risk is simply not responsible.