I think the very real fear that the Gundam propagated since its creation is by all means a narrative loophole that allows for stories of the mass production of these terror machines to feel right in its setting. I feel this debate is just due to narrative preference.
Literally not a single OYW Gundam has ever outperformed the RX-78-2 btw. The Gundam was never the legendary part, it was the person piloting it. The federation just didn’t want people to know this, hence why the Titans were so anti-newtype in Zeta.