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.
Honestly have no idea. In current times we're seeing the law do all sorts of things that I would have told you months ago weren't possible. I'm realizing that most of what held up our current system was nothing more than good faith.