A lot of that is down to Dortmund's own choosing rather than being hamstrung by FFP. In the past few years they've received ridiculous sums of money for players. 135m for Dembele, 100m for Bellingham, 75m for Sancho, 60m for Haaland, 60m for Pulisic. And their most expensive singing of all time is what, 30m? If they actually reinvested all of that profit they made from player sales then of course they could consistently challenge for domestic and European titles without outside money.
That is really trivializing their struggles and that of clubs with modest budgets.
If it was that easy many clubs not named Dortmund would have become consistent challengers in their leagues
The salary top players demand is a major part which is even more than the transfer fees. Clubs like Dortmund must invest properly and cannot have any margin for error while the Bayern, Man Utd Madrid Barcelona can make errors and correct it next season by splashing another 100m. Once the players of smaller clubs do well, they are off and another rebuild starts, Year 1 young player is inconsistent and growing, 2nd year he is playing better, 3rd yr you lose him and start all over again
In the past 10yrs Dortmund has played Lewy, Aubameyang, Immobile, Isak, Alcacer, Batsuayi, Ramos, Haaland, Fulkrug, Haller as striker 10 different strikers in 10yrs you can see how hard it will be to adapt tactics to different profiles, wait for one to grow and likely miss just because they have a smaller budget. As soon as Lewy Auba, Haaland turned out good, they were on their way out while Bayern in the same time has Lewy, Mane and Kane. Mane didn't work out thy splashed 100m on Kane. They don't need to worry as much about losing players
Crystal Palace for example are starting to get a rhythm which will make them lose their key players and have to start all over
Madrid took Ronaldo from you and gave you 80M, Years later you reinvested that money but never got 30% of Ronaldo abilities. If you or Ferguson had a choice he will rather keep Ronaldo because the many players they bought and failed while trying to replace Ronaldo