I read this as "Why Threads is Meta's biggest problem right now" and got really confused at first
Why is this posted to the android community and not the Home Assistant (or other home automation) community? Thread/Matter have nothing to do with Android or smartphones
I don't understand why smart devices don't all just use wifi. What problems are these competing standards solving?
Wifi congestion for one. The other issue is a lot of people don't want these devices on the Internet. Don't want them phoning home with your personal data. Don't want them to stop working just because your ISP sucks. Z-wave, Zigbee, and Threads/Matter keeps it local, is faster, and is more reliable.
Zigbee mostly uses 2.4Ghz, so it's not helping remove congestion from that band anyways but I guess the other protocols do. Can't the devices phone home as soon as they're connected to a hub that's internet connected? Even if the hub has to cooperate with the device, they're made by the same manufacturers so I wouldn't trust tleither of them.
With wifi I can spin up a separate iot vlan that cannot access the internet. That vlan doesn't require my ISP, it's entirely local. I get to control exactly who connects and even who they connect with. I don't see that same control with the alternatives.
I guess I do see an argument for very low power devices using a lower power protocol, but I guess I just don't have any of those devices so it hasn't been an issue for me. And like you said traffic congestion is a valid problem, I've just never experienced it.