I think its somewhere more in the middle - software bloat is getting to legendary proportions (why do I need 16+ gigs of RAM and a modern cpu+gpu to run a calculator that I could buy for 50 cents 20 years ago?), and the software bloat drives the hardware bloat.
The truth is we don't need fab engineers because the applications we need to build require already "solved" hardware problems which are mostly supplied en-masse by a the few, large companies.
But, the deeper truth is that we don't need any of it... I have been recently and somewhat pleasantly surprised by how little I truly need. E.g., a 200$ chrome-book satisfies most of my needs. I have much, much beefier computers, hundreds of gigs of ram and multi-core processor, etc...all a waste. (I work as a software engineer and regularly find myself maxing my cores for things I don't really need).
If I could build my own hardware and have it actually do things, man, that would _useful_. Unlike this giant rickety tower of babel we have built...