It's proven that if your league is tough, then you produce really good teams and players. Competition makes teams try really really hard. Bayern at least has consistent challenge from Dortmund and even in cups fight very hard with others but PSG can clean sweep everything if they just try.
They have been having it too easy, so even with superstars they didn't try hard anymore. They lose or draw because they take things too much for granted.
PSG spent big, it was strong enough to win everything, but it wasn't "shaped" by good competition.
I agree with you that the tougher the competition in the domestic league, the more motivated a club will be to improve. I'll take the example of the Premier League for example, they get tough competition from all clubs, we can't easily predict matches there, because there clubs that are considered weak can become a stumbling block for big clubs. And we can see what they can do in European competitions as a result of the intense competition in their local competitions. Unlike Ligue 1, we can see what they can do in European competitions, especially the Champions League. They can't say much there.
We can't deny things like this, because after all this is part of the mental formation that will be very useful.
That requires a lot of money though. No other team has owners like PSG has and that means we are not going to see them do a lot better. PSG has done better than other teams because they have a rich owner, which means that they were able to spend a lot of money, and get sponsorships from the owners basically, or at least their network and all that.
This made PSG richer and get all those players, we all still remember Neymar being bought for 220 million, still to this day the biggest transfer ever (though I believe it will be broken one day by Saudi clubs). So all in all I think it's important to remember that we are not going to see other French teams do that well until someone rich buys them, and PSG will stay the biggest until then.