In some places I'm sure it is true that Comcast is essentially a monopoly. Though I'd think that anywhere you can get cable, you can also set up a dish for DirectTV and Dish Network, so they do kind of compete against the satellite companies for TV service. Here locally, they do compete against AT&T's uVerse (or something like that) for TV/telephone/Internet service. And of course their Internet service competes against AT&T's DSL. And various local broadband wireless providers. And of course they have to compete against alternative options for getting TV programming (over the air and Internet download/streaming).
I'm not sure that you can definitively say they have no incentive to upgrade. They have just rolled fiber out to our neighborhood, and we did sign up for the xfinity triple play package. We are now getting phone/internet/cable for less than we were paying to Dish/DirectTV and AT&T combined. The speed (20Mb/s) is faster (verifiably and consistently) than anything else that's available. The equipment for xfinity is a step up in several respects from what we had with either Dish Network or DirectTV. There are a couple features we miss from Dish Network's equipment but they are more than made up for with the new features that were lacking in the satellite systems (for instance HD at every TV, DVR playback (in HD) at every TV). They are enhancing their OnDemand service which is a way of differentiating their service from satellite, so it appears that they are trying to compete against the satellite companies.
Knowing ComCast's reputation I am prepared to start hating them at any moment, but so far the xfinity package has been the best deal we have ever had.