Is Cosmetic only monetization viable in the long run?

Just to be clear I'm not saying the current system is fine, but I do see a lot of people claim that cosmetic only approach is the best course of action. And it is for consumers, but I see a problem for developers.

Let's assume Vanessa has 8 skins in the game right now. You, the player, might have a skin or two that you like already.
The developers add a new skin for Vanessa every 3 months or so, in a battle pass, or as a standalone purchase. But you do prefer the ones you already have, so you don't buy the new. So three more months pass, and the new skin you don't like, so it's a skip as well. Another three months, and decide to buy it because you kinda got bored of the current ones. And then it might take another year before you buy more skins.

Every new skin has to compete with every old skin. When there are 20 skills to choose from, 21st skin needs to be more appealing than every other. There are of course people who buy them all, but it is a small percentage of people.

The solution? Cosmetic powercreep. Increasingly cooler skins. Now your hero is animated and has facial expressions. Now the hero portrait is twice as big. Now Vanessa pops out of the portrait and a 3d model of her delivers the killing blow. And as things get bigger, the artstyle starts clashing even more because they just don't fit the "original" vibe of the game anymore. Hearthstone has Legendary and Mythic skins, that I really don't like the look of.

And new players will probably want to buy one skin they like for the hero they play. But in Bazaar, skins are supposed to be tradeable. So new players will buy them off of someone else for a dollar, and Tempo will get only like 10 cents off of that.

I can't see the game being sustainable on this model for too long, so a cosmetic only approach is only delaying the inevitable return of pay2win, unless there's a LOT of cosmetics. If the game wants to be free2play, then I think it's impossible without something that feels at least a little bit predatory. Whales and irresponsible spenders are, unfortunately, the lifeblood of life service games.
It's too early to tell how this will go, but if I'm gonna be optimistic, at least they're trying to find something that's fair "enough" to the playerbase in the long run.