The duplication we see is, I think, an unfortunate side effect of the manufacturing process rather than any deliberate attempt to steal a march on the competition. I don't know that Rails would have commissioned the Terrier if they'd known that Hornby had the same prototype in the works. And I feel sorry for Kernow, who planned a 1366, then Heljan announced the same, so Kernow switched to a 1361, and Heljan did one of those too.
With current models, it takes so long to get from planning to production that I think there's a bit of a damned-if-you-do, damned-if-you-don't situation regarding making your intentions known. If you announce your model too early, then you can wind up with such a long period until release that potential buyers get frustrated. I know I've given up on the Bachmann 94xx, and the Kernow D600 Warship has been in development so long that I'm pretty sure it started out as a modern image model. But if you announce close to release, you wind up with a situation like the one with the Terriers, where both manufacturers are too advanced to back out.
That being said, I think the market can support duplication if there's sufficient difference between models to give buyers a choice. For example, the Oxford Radial is not as detailed as the Hornby one, but is significantly cheaper. Hornby even duplicates within its own range, thanks to Railroad.