Dominance of large players is indeed a reason for less "dynamism".
The flaw would be to assume that more dynamism, in and of itself, is better. For example it could come from many small players reinventing wheels (i.e. each Mom-and-Pop shop in my example above having their own supply chain).
That's somewhat inefficient, but it also creates lots of jobs. Arguably, what we are heading towards or perhaps already have now is an economy that's quite efficient but has large structural problems; a significant number of people no longer have meaningful jobs due to automation, Many more are underemployed to facing stagnant wage growth due to a skills gap, and there just aren't enough highly-skilled jobs to significantly increase employment.
Our economic top performers performer better, but any firm displaying merely good performance is regarded as a failure, so revenue flows become increasingly concentrated and markets uncompetitive, as incumbent advantages vastly outweigh competitive pressures. This is problematic in the round.
In isolation I agree, but it's tricky with globalization. For example my read of Greece is that it has too many mom-and-pop businesses which, even though they work 60-hour weeks, cannot compete with an efficient, modern German or Dutch company whose workers work a strict 40-hour week but in a well-managed Enterprise. Of course there are other big differences as well, corruption being one of them, but I think the cultural difference in company sizes is a big one: Greeks mostly want to work for themselves or in family businesses, whereas a typical German "small business" (as in the famous Mittelstand) has more like 50 employees (often 100-200), not <10. An economy built on tiny family businesses can't compete with a more modern economy built on Enterprises (in the sense of a corporation with division of labor, employees, professional operations & business management, etc.). SMEs in the 50-200 range are ok, but the tiny family businesses and one-person shops have trouble, and an economy dominated by those has few jobs and a poor economic base.
Also worth noting that big companies get unfair benefit of not paying VAT on internally created and consumed value. Greeks solve this problem by just not paying tax ;-)
Inefficient makework is a horrible form of welfare. The formerly employed should create new products/services to sell, or use their free time to organize and agitate for something like guaranteed basic income paid by the wealth concentrators.
The flaw would be to assume that more dynamism, in and of itself, is better. For example it could come from many small players reinventing wheels (i.e. each Mom-and-Pop shop in my example above having their own supply chain).