I think some people miss the point. It's not about where we process our data, it's about whose data we are allowed to process
Though you could process UK citizen's data, for example, you would not be able to touch the EU data. Thus 28 countries' data won't be able to just "be processed" in the EU and then shipped back to Blighty. Literally all that's gone. We would be a non-compliant country, to all intents and purposes, and like a UK company saying they process all your personal data in the Bahamas (currently illegal), we wouldn't be able to process any of the EU's data. They wouldn't give it to us, and we couldn't take it.
That harms us more than it harms the EU. We've just taken ourselves out of that game and made life difficult to do business with them. As such, they'll do business with one of the other nations that can process their data without having to do a thing but tell their own data controller, rather than with us with whom it would be illegal to process their data.
When you consider that we're the financial centre, banks will flee. Suddenly porting personal data between the EU and the UK is like trying to get blood out of a stone rather than an automatic sharing checkbox exercise.
If you're an EU-wide bank with a UK headquarters - you have to set up and move everything back abroad anyway. May as well just go and leave a small UK-only business behind that is entirely separate. But you MUST move your data, so you must move your headquarters and the core business back to the EU.
Literally, in terms of data, we can say "Don't go" as much as we like, but even for a multi-national company trading in all the EU countries, it would be illegal for them to process the majority of their own business's data in the UK, as it wouldn't be under EU-compliant data regulations. Unless we have exceptions from day one with EU sign-off, those foreign companies will splinter off a UK branch (at best) and then just disappear.
That's a lot of business to lose. The same applies to everything from mobile phone providers to banks. Every EU-owned international company now has to effectively legally separate itself, and every UK-owned company has to jump through all kinds of hoops to try to do business with the EU as a foreign entity. It's not just as simple as "we'll do it ourselves". We would become a legal persona-non-grata in terms of processing any data to do with them, from the tiniest company up to the largest bank.
We've effectively locked the door and then battened it shut, in a legal sense, and then expect people on the other side to do business with us. It took four years to sort out a small, quite-friendly, neutral and sensible country's data access. I wouldn't like to think how long it will take to get data compliance for the UK. I'm guessing a LOT longer than the UK has to do so.