To this point, I believe that there's plenty of local/regional competition to Disney World already. Beyond the Smoky Mountains area, see Hershey Park in the East, Cedar Point and Wisconsin Dells in the Midwest, the Southern California theme parks on the West Coast, etc.
The disconnect is that most of the complaints here seem to be that Disney World has been continuously pricing themselves upmarket, yet for many people, that's a *feature* (not a bug) compared to local competition (outside of Southern California). People might not say that explicitly, but it's reflected in their actions. I live in the Chicago area and love Six Flags Great America as a theme park fan and Wisconsin Dells for the water parks, but part of the attraction of Disney World despite those local options is that it's specifically a premium experience by comparison. It's like comparing local casinos to the Las Vegas Strip - playing blackjack might be exactly the same in both places, but the overall ambience is completely different and that's why people (at least in normal non-pandemic times) continue to see Vegas as a unique vacation destination. Similarly, the typical Six Flags park actually has a better slate of thrill rides than Disney World, yet Disney World is simply a very different overall experience that goes beyond the rides themselves. Frankly, part of it *is* that it still feels more like a premium experience compared to local parks - it's the theming of the parks, the quality of resorts, the top shelf IP that the local parks can never have access to, etc.
Now, could Disney be in danger of charging premium prices for what is increasingly a non-premium experience? That's certainly possible. However, at least in pre-pandemic times, there wasn't any evidence that rising prices was really reducing attendance much at all. Disney World demand seemed pretty inelastic to price increases, which might not be great for me as a consumer but quite attractive for me as a stockholder.
To the extent that there isn't local competition to Disney World, it's that there isn't a true *upmarket* local alternative anywhere outside of Southern California (where Disney and Universal also already have firm positions). There's plenty of local middle market theme park competition already. Of course, it doesn't seem that the goal of this discussion is to create local theme parks that are actually *more* expensive than Disney World.