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I have created a more private cloud compute that is superior to Apple's implementation. Why can't Apple users choose my better service?
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Sounds like Apple offered to implement that, but it didn’t fit the EU’s requirements.

I suspect if you paid apple enough money, and were willing to prove that your personal Private Cloud Compute did meet their requirements, it wouldn’t be impossible.

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That would be a good argument to take to the EU.
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If they let me use my own server, they won't even know my usage patterns, which is even better for privacy.
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Even if other vendors had Apple's hardware, it's doubtful that Apple would give competing services equal footing. See: The App Store.

The hardware isn't a real justification, just a convenient fig leaf.

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