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The Ugliness of Privacy Notices
Yet, there is a market in which closed devices are the norm: cell phones. The US cell-phone market is dominated by phones that are only capable of doing what the phone company allows the phone to do. Yes, it is possible to purchase an unlocked phone, but that incurs an often significant cost.
I think there are two equilibria here - one in which device makers and network operators collaborate (i.e. the cell phone model), and one in which device makers and network operators remain independent (the internet model). I'm not convinced that the market from internet access is incapable of switching to the cell-phone market equilibrium.