it's a good deal in the interim period where stuff is being figured out. like that brief time when Netflix had EVERYTHING and was charging a pittance. Now they rely mostly on their own homegrown garbage only and raise prices constantly, and you need to sub to 3 other shitty services to get access to everything and it comes out to basically the same price as cable except it's all disorganized and crappy.
When MS was handing out fat deals to devs for great games that were in development, and charging a small price to gamers because they were trying to get subs, it was awesome. Like I paid $1 on top of my XBL to get UGP for THREE YEARS. That is insane. But then everything adjusts and it's not so great. And when I say adjust I don't mean the price (which is going up), I don't mean the amount of the deals with devs (which are going down), but also how the games are made, what they incentivize, etc.
Slight disagreement because I feel that Game Pass is absolutely still a great deal at full price, if you find games you like.
But I definitely share your concern about what the market forces of GP could do to the games industry longer term, the incentives as you say.