Basically the title.
I have seen the EU-OS/Suse discussions for some months now. However, Ubuntu/Arch/Fedora are extremely mature projects. So competing against them will be hard.
I want to know how realistic the scenario (described by the question) is.
Compete with what ? I want to see a decent budget and at least 5 year plan first. The scenario is ridiculous, each distribution have so many mirrors that you can’t just ban internet, baning development is even more unrealistic given the nature of linux development. What they gonna do, ban email ? https://git-scm.com/docs/git-send-email