It is game theory. Consider what happens in the real world - it is strictly easier for Iran or any country with a competent infrastructure to just shut down the big internet pipelines for retail customers. They don’t do that. China has spent untold amounts of money creating a stupidly effective surveillance state which is still technically open to the internet. Why?
So your assumption that “dictators will do the worst they can” is wrong. They will keep pushing the boundary outside the current Overton window but can’t do it in a snap. You force their hand by not providing alternatives and suddenly they’re stuck. They can’t just restrict feminist websites and claim that it is harming the social fabric then expand the net slowly. It is all or nothing as the OP explains.
More accurately is the ruling class wants to stay rich, and if they can stay rich without needing an educated and non-poor populace, all the better, because the hungry, disconnected and illiterate do not start effective revolutions. You see this in many resource dictatorships, since you don't need your populace to create your wealth.
In dictatorships where they need the populace, then they are in a tough spot, because the only way you get rich is having a developed population productive enough to tax, which you see in Singapore, China, Dubai and Iran somewhat.
It is this kind of authoritarian regime that needs the internet, but also wishes they didn't need the internet in the case of Iran and China.
They’re not equivalent statements. Dictators can be fine with making their countries poorer but still maintain internet access. There is a critical point (which isn’t well defined because we’re probably the only species in the universe at our level of tech that has no social science of any merit) beyond which policies will start backfiring. At the beginning of their reign, the dictator will take risks and push that window. Once entrenched, they will have to use a lighter touch unless they entirely go the North Korea route (which is difficult to do in 2022).
So in essence, this is a positive move because even dictators willing to destroy their countries for power will have to make a choice on internet access well before they gain enough power to cut it off entirely.
So your assumption that “dictators will do the worst they can” is wrong. They will keep pushing the boundary outside the current Overton window but can’t do it in a snap. You force their hand by not providing alternatives and suddenly they’re stuck. They can’t just restrict feminist websites and claim that it is harming the social fabric then expand the net slowly. It is all or nothing as the OP explains.