We really want to avoid https://en.wikipedia.org/wiki/Kessler_syndrome, and so far humanity has shown a pretty terrible track record when it comes to exploiting earth's commodities or ensuring the prevention of long-term global disasters...
Already we have astronomers being increasingly hindered by man-made objects dashing through the field of view of ground-based telescopes.
fiddling with the settings for activating the satellite tracking plugin and TLE-data import, and maybe even import ones own horizon panoramic silouette for perfection.
Stellarium is a really very good program!
I'm in the middle of a light-polluted city, and I can observe a satellite transit directly overhead every minute or two.
Kessler syndrome is far more likely to be caused by war than progress in satellites. Space is big and sats are tracked and powered nowadays. How about we stop starting wars instead of stopping progress?
Space based telescopes are going to be vastly more useful and popular than land based telescopes today.
As costs come down dramatically access to space is going to expand rapidly, that is a good thing, not something to fear.
This is not an either/or choice - we can both improve life on earth and expand into space, and we will.
Furthermore, for transit-hunting experiments, a slight dip in a star's brightness once per year or once per decade is the entire signal. Even if the satellite doesn't produce a moving dot, surely it cannot be transparent and non-refractive.
Some things work really well in space, some do not. Low-cost launch will revolutionize some experiments, but not all.
Building radio experiments like SKA, big telescopes like TMT, or starting up innovative low-budget instruments like Dragonfly is still impossible with low-cost launch. In the latter case, until a graduate student with a screwdriver can make daily adjustments to an on-orbit instrument, we will lose the earliest-stage R&D capability.
Finally, it is essential for our future generations to see a dark and unfettered sky with the human eyeball. That perpetual perspective, for 7,500,000,000 people, is inaccessible with launch vehicles.
The colision of signals travelling in free space, that is.
Unless we talk about super directional signals, eventually we will run out of bandwidth to talk to those satellites.
Perhaps higher orbit satellites could talk to SpaceX satellites in lower orbit(again, very directional signals) which in turn could relay those signals via internet, not yet practical though.
The issue with kessler syndrome is that once it starts, space is immediately unusable for decades if not centuries, even if we turn everything off and stop launching new satellites.
You can still launch through a Kessler shell. It's not very dense in absolute terms.