I think both could be true. A strict LE system would put some outfitters out of business. Before we all start agreeing to go to LE to get even with the big bad outfitters, I think that there would likely be some unintended consequences.
First LE is not going to open up much privet land to the public. Lease rates would likely drop because less opportunity is less value. Maybe lower rates would entice some landowners to look at BM, but I am going to bet the most landowners in BM are not in it for the money. I doubt that many would switch from outfitters/hunt clubs to BM.
LE would likely favor hunt clubs over outfitters. Hunt club members are leasing for the total outdoor experience, buck deer are only part of that experience. Outfitter on the other hand are going broke with out reliable buck deer clients in eastern MT. Other opportunities like antlerless and bird hunting might cover your variable costs, but without reliable buck deer you can't turn a profit. I am not an outfitter so I could be wrong. Some of the outfitters would know better.
Tags would still be essentially OTC in some units. Take 704 and 702. 704 contains the Custer and quite a bit of accessible BLM and State land, 702 is almost entirety private land. Demand for 704 would be high and it is likely you would be waiting several years for a tag. In 702 it is likely you could pick up a tag 2nd or 3 rd choice. The pressure on the small amount of public would be intense and any BM rancher would likely react by restricting hunter numbers or dropping out of BM. A NR looking to hunt with an outfitter could maybe still buy a leftover tag in 702.
I am not aware of any states that have a strict LE system. Most if not all have some form of wealth, outfitter or transferable landowner tags. I doubt if MT went to LE that we would be spared and once you put a crack in that dam it is hard to stop the flood.