Most of the time they'll go on Twitter or the noncompliant websites instead. That being said, published numbers have shown VPN subscriptions skyrocket. Public tech skills aren't what they were in the 2000s, but people who can't/won't verify ID are motivated. It is a powerful force after all.
It might help short term profit, but ultimately a VPN company relies on their customers trusting it, so spying is likely to hurt them - once a reputation gets trashed their customers are going to switch.
Government compliance depends on which government has jurisdiction, so it makes a lot of sense to avoid authoritarian jurisdictions.
e.g. NordVPN was originally Lithuanian, but is now based in Panama due to its privacy-friendly laws.
I hope you’re right! There’s certainly nothing inherent stopping a widespread shift toward VPN usage and other technical work-arounds that have been part and parcel of internet usage in many countries for decades.