Completely agreed: the way he articulates the problem is self-defeating. Apologies if this sounds absurdly abstract or hand-wavy, but I think the correct framing really has more to do with a sort of essential clash between law and software as technologies of social regulation.

Written law was something very important historically: from unwritten norms to codified representations that, however imperfect and provisional, were more or less accessible to all and changeable through whatever process, democratic or otherwise. Over the last decades, we -- and this could be taken rather literally as "the readers of hacker news" -- have been encoding so many aspects of the world into software in a way that doesn't clearly coincide with the legal norms of any particular let alone every country.

On the one hand, software is clearly "better" than law in at least the sense that the former eliminates the necessary ambiguity of the latter: the interpretation or "implementation details" of even just a particular law are always disputed. Perhaps a particular implementation of cross-border financial transactions, say, or of personal identity doesn't in fact reflect what the developers or product managers intended, but if that is identified it can be changed.

Yet, on the other hand, it is certainly true that, from the perspective of regulators let alone the masses, the resulting situation is much closer to pre-law. Nobody has any idea how or why they were suddenly banned from Instagram or their PayPal account closed, let alone how money actually moves around the world when they send a friend funds through Transferwise. Certainly, if we don't even know how things are working there is no process by which it could be decided that things should work differently, let alone a process by which software would concretely be made to work differently.

Indeed, I am skeptical that law as such will ever be able to regulate software: even just considering the problem in terms of a single country/legal system, how does one actually guarantee that the ever-changing corpus of code complies with the ever-changing and essentially ambiguous body of regulations? One of course sees this with the EU as the "avant-garde" of the struggle to regulate software. They pursue either these incredibly general wars on "cookies" that don't solve real problems, or endlessly deliberate when it's already too late about how to handle AI, or produce something relatively well-conceived like GDPR where enforcement is then incredibly unclear if not impossible.

TLDR I have no idea what the solution is, but I think the intrinsic problem of law and software is incredibly important to take seriously as software eats the world. At the very least, it's not just a problem of "competition" since, as you note, monopoly is at least one sufficient condition [1] of eventually rendering the way software regulates the world transparent and open to change.

[1] Undoubtedly, there are other ways this could possibly transpire through open source etcetc -- however, even in that case there has to be a guarantee that particular software defines the operations of a particular domain, i.e. that there exists software through which one can understand that domain and hypothetically change, which is in some sense just a "public" monopoly.