I agree with you--however, programmers have not become even better paid because society values programmers. They have become better paid because software is a relatively new artefact in human society which has taken the human life by storm, which has made software companies immensely profitable, which meant more companies wanted to create software and attract the people that could help them do it.

As software takes a back seat (or at least a "normal" seat) in society, would we see a normalization of income? Could this be hastened by the development and introduction of tools such as copilot?

Potentially, unless there are new / better things that humans can claim they can provide compared to AI tools. This is the point where I think you and I agree, and I think it's your primary argument in any case (unless I'm mistaken).