Bitcoin dominance is a very important metric and we all should know it, why!
Bitcoin dominance and if you understand it, really shows how strong Bitcoin is performing!
First of all the term "dominance" is wrong, it is "market cap ratio" and it is the most useless metric that has ever existed in any market. Even if you are making the correct conclusion based on it!
You have a good point about solo bitcoin being compared against total of thousands of shitcoins though.
The big fundamental flaw in market cap and their ratio is that you can not control what "supply" value is the correct value to use and less importantly what "price" is actually the correct price.
Take the biggest shitcoin of all times ethereum for example. It has 72 million premine so it is not part of its supply. Same with BNB, XRP, etc. they all have "fake circulating supply" and when you remove that their market cap drops significantly.
The same problem happens to price but mostly about new shitcoins. In simple terms you can create a new token for virtually no cost and then sell it for a billion dollar to yourself (you don't have to pay anything just say the transaction took place or put the money from your left pocket into your right pocket) and that means you shitcoin's market cap is $1 billion * whatever supply it has!
Bitcoin has been around for a very long time and after a few years, more coins have arrived to overtake Bitcoin. But so far, not a single coin achieved an overtake.
That's not true, I believe it was 2017 when a shitcoin nobody had ever heard of surpassed bitcoin's marketcap because someone did what I explained above