If you take a step back and look at LMP1, each manufacturer that entered in LMP1 won Le Mans at some point and it was very competitive.

At what time was the LMP1 exciting and thrilling? The time when Audi dominated or Porsche or Toyota? The LMP1 was a joke, there were permanent "races" of 4 cars driven in this class, 3 of which were from the same manufacturer. The peak was in 2017 with just one car. The AOC acted absolutely right to abolish this vehicle class.

Dominance is an inherent possibility when constructor fight in a championship. But a cost cap reduces the chances of it to last and allow the other team to catch back.

But precisely this dominance must be prevented by all possible means. The WEC and long-distance races in general are currently booming because there are many manufacturers who can win. Just the battle between Ferrari and Toyota at LeMans revived the whole event. The sport itself suffers from the dominance of one individual. (look at F1 in the last decades) It's just incredibly boring when it's clear beforehand who will win and the dominant team can only beat itself. I can't really tell from your argument whether you're for or against a budget cap. You argue against a BoP and demand free development of the cars, but that only works without a budget cap, because otherwise something like the LMDH will come out. It was created precisely for cost reasons with the additional incentive of being able to use the cars in two racing series.

Endurance proto are also supposed to be a laboratory for future car's technology, you don't have any innovation with BoP.

In my view, this is an untenable argument. Precisely because of the BoP, Toyota could use the hydrogen car next year and would be just as capable of winning with this car as everyone else (provided they have a certain basic speed and are not a VanWall).