This is competition, this is bitcoin, this is what sidechains offer, decentralized implementation of new features.
how does one innovate with new incentive options in this SC system, say incentivising storage or bandwidth, how does one go about experimenting with new PoW replacements?
SC is an terrible solution for testing features that could compete with bitcoin, Testnet is where you test bitcoin features. the few market is where you test something else.
You can easily innovate with new PoW options for example, those sidechains by definition could not MM with Bitcoin and would need their own miners, but that is fine. SC could also have new incentive structures (such as different fees) or different ways to store/compress blocks or different ways to communicate transactions. You can make them be anything you want.
The point clearly went over your head. SC is not for
testing features, it is for
implementing features.
If you've ever tried to role out new software to an installed user base you would understand why this is so useful.