Most people don't even realize Bitcoin has it's own decentralized exchange, but it does.
Which only 0.001% of the population can participate in profitably. And it ceases roughly 2033 or unless transaction fees scale up but there is a Tragedy of the Commons dilemma there as well.
It doesn't really even matter if it's profitable or not. You can define Bitcoin in one sentence:
The purpose of mining is to create a permanent two way peg, decentralized exchange, which thus results in a permissionless system.The economic incentives are a side issue, but seem to work thus far. It's designed to bounce back and forth between profitable and unprofitable. The fact that it's deflationary creates a time opportunity cost reward to generally remain profitable over the long haul.
You missed the point entirely. Only 0.001% have the economies-of-scale to mine Bitcoin profitably. Sorry your argument fails on the economics of proof-of-work hash functions, unless you can argue there is one that can't be significantly optimized for an ASIC and economies-of-scale for cheaper electricity located next to utility scale hydropower (even free electricity perhaps if you do a handshake and wink in China with a Communist Party official).