Coinbase is exploiting the relatively few options consumers have even at this point. While there may be alternatives out there for buying cryptocurrency, I find Coinbase convenient, but ideally I'd use a service with lower fees. I agree their Neutrino acquisition should raise eyebrows.
Why are you saying there are few options for users? I've never used coinbase, because I think it's restricted and my country, but also because I never really needed it! There are nice wallet providers like Blockchain.info and electrum, there are nice exchanges like bittrex and hitbtc. We also have online exchanges of the top cryptocurrencies to fiat bank account under reasonable conditions in my country. Spying on users is not okay. However, some people might not care about such things as privacy and support intervention, because sometimes it can prevent serious crimes from happening. Coinbase is still nice for those people.
Stopped using coinbase a long time ago and never looked back. There are plenty of options now as you said.