Recently we had tire competition with DMACK 2014-2017 and before that with Pirelli until end of 2006.

The overall effect wasn't positive.

Yes you had some positive effect like DMACK paying for Tanak's and in 2017 Evans starts but overall it reduced the competition.

The reason was that one tire was always significantly better in one set of conditions. To the point that it got boring.

DMACK made the tire better on wet+cold gravel, so in GB you had one rally for DMAC(Evans) and one for others.
Before that Michelin was much better on dry tarmac so Pirelli (Subarus) were basically always on last places on tarmac. When it rain d Pirelli was much better, so every stage was Subaru 1-2.

Thing is tire manus even did this on purpose (certainly DMACK did). Making their tires much better in specific conditions to guarantee a good result on at least one rally, rather then trying to match overall.

In a field with too few cars, this kind of "automatic" differences made for an even narrower field and fewer close fights.