Even if you could make all the other possible vendors run private cloud compute style stuff that would be a lot to manage.
And I can’t imagine the EU would like, and as a user I would certainly hate, the “OK you can use Grok but you lose all privacy too bad“ dialogue box they could make.
Most sysadmins know that hash matching only mitigates a small subset of rare upstream attacks. Apple could still be MITMing the whole thing (SSL added and removed here :)) and no auditor would get the chance to check. The offered audit is so weak that I would not trust any FAANG business to administrate it.
Apple is once again demanding arbitrary centralization to give them an undeserved veto power. None of this is for security.