The issue here is that it isn't possible for anybody else to negotiate the same deal Google was going for with this settlement. Google was trying to reach a deal with an entire class, not a specific group of authors. So while a competitor could negotiate a similar deal with specific authors or groups of authors, they would be unable to create a deal with the entire class of authors (unless faced with a class action lawsuit and able to negotiate the same settlement).
It sounds like the judge agreed with this objection and indicated that the deal might work if authors needed to opt-in rather than opt-out. Under an opt-in system, authors could opt-in to a competitor's service as well as Google's. Alternatively, Google could try to get copyright law changed so that their opt-out system would be allowed by law (and competitors could set up similar systems without facing infringement lawsuits).