That's basically the situation today. The "big three" distros are Debian, Arch Linux, and Fedora. Otherwise, there are a few other lone wolves with unique package managers and philosophies: openSUSE, Gentoo, Slackware, NixOS.
Everything else is just a minor fork of these. Building a real, independent distro is out of reach for most projects. It's like reinventing the wheel. Amazon, for example, based Amazon Linux on Fedora. SteamOS is based on Arch Linux.
There's a small handful of "real" distros, while the dozens of other options are just forks of the main distros. Why the small forks? There are several motivations:
- Usability and app curation: This is the biggest. You just want a major distro to look different and come with a different selection of default apps, which can make it friendlier and more accessible.
- Philosophical splits: Sometimes you don't like a new decision by a major distro, e.g. systemd migration. Then you might fork it without systemd.
- Optimization: A good example is CachyOS. Major distros want to maintain broad CPU support and stability, so they don't tap modern CPU instructions/optimizations like they could.
- Security or update cycles: A minor fork can apply niche hardening that doesn't work in the mainstream. They may either want faster package updates, or conversely, slower and better tested package updates.