After discussing with a few community members, I have changed my mind on this proposal and support it. This is under the new idea that sparked from conversation that this should in fact encourage more SP competition by letting other SPs also put up their own proposals for overlapping services to compete on price/quality.
I see this as blend of what @DisruptionJoe proposed with RFP - Abitrum Short-Term Incentive Program (STIP) Data Monitoring and Reporting (compete on a SP) and the new idea that multiple SPs should be chosen to encourage open competition.