It's a free market, if something sucks enough, it'll fail on it's own.
The massive success of the app store where looking for quality is an alien concept and buying reviews is not only normal, but absolutely 100% required to get any sort of visibility, proves you wrong. Several talented mobile devs stated this and they were forced to do steam ports because quality doesn't get recognized at all there, yet it's the most profitable platform of them all by a massive, massive margin. Ironically speaking, once greenlight hit the steam store, a much larger % of terrible games got the spotlight over the deserving games before the feature was implemented. That means, the situation actively got worse overall because the system was left for free exploitation. And surprisingly, a ton of companies exploited it.
The way Kickstarter usage evolved as an additional marketing campaign for A and AA titles, completely defeating the core of the idea in a comical manner, proves you wrong.
The way early access got completely out of hand and has very quickly mostly being used with a malevolent intent (an actual plan to never finish the game in the first place and just move onto the next early access project instead, itself designed to remain forever early access - in some cases we even see cash shops or expansions being sold for early access games, which is hilarious) proves you wrong.
The way founders packs became more and more intrusive and game-ruining proves you wrong.
You have things that have no regulations and you leave them like they are and companies that exist to make profit will inevitably exploit it because that's why they exist. It's not evil anti-corporate tinfoil hat propaganda, it's literally how the world works at any business level. My boss owned a tiny ass business and exploited the fuck out of everyone the moment they showed a sign of ignorance or agreeableness, because if you didn't, the competition would take it. And if it gets out? Pay the small 10k EUR fee to start the business under a new name and you still end up in net positive, because you're so small people won't connect your old businesses. Just like what asset flip indie devs operate step by step in the game industry, not incidentally. So no, leaving shit that is easy to exploit in every possible way "to the market" doesn't work, as greenlight has been pulled after years of thousands of scams should convince you. You need some sort of baseline policy/guidelines at the very least, of which pulling games in and out of the steam store at your leisure once they've been approved once has absolutely none of.
The example is the same. You are absolutely allowed to do an emergency takedown of your own game if you believe a copyright clash may happen (infact you can just do that without giving any reason whatsoever), then you are allowed to put it back on after an investigation and making sure now everything is alright, after you pay the tragic, business-destroying sum of . . . $100. You don't have to provide any documentation or testimony or proof that this actually happened, you can simply do it. So I don't see how this mechanism would be any different than a legitimate music copyright licensing issue, to the end consumer. Game was up, game gets pulled down, media covers it, more people are enticed to own it now than they were before. The end result is the exact same, only thing that changes is the legitimacy of the reason for the takedown. And since there is absolutely no repercussion for it at this time, this difference is irrelevant.