> cancer patient is diagnosed, the GDP goes up. Is this how we measure economic progress?

Yes, obviously so! Diagnosing cancer early is one of the best ways to save someone from it. The cancer is there anyway, it's a natural occurrence. The economic activity that leads to and follows a cancer diagnosis is what economists call wealth: the things we do for each other than make each side mutually better off.

All the examples are like that. Nobody wants oil to spill, but accidents are a fact of life. The GDP created by mopping it up on the other hand leads to a cleaner environment, which is another form of wealth.