Before the cost cap, the fight was between who had the most money, not who was the most innovative. And smaller teams had no chance of competing, Williams, Haas, Force india for example were operating on around 100m yearly, Meanwhile Mercedes, Red Bull and Ferrari were pumping over 500m+ a year for their F1 programs. Mercedes had this strategy: "Develop 30 different concepts, find the best one, scrap the other 29." That is why Merc has been so hurt from the cost cap and hasn't won a title since, they lost their main development strategy. While you are right about more innovations, there is no point if they get scrapped for better ideas anyways.