I think a lot of this is because the economic pressure is weak right now both on the side of labor and consumers, due to decades of severe upward wealth transfer. A lot of these companies are not improving or even maintaining their productivity or quality of service, and while there are probably some productivity gains for engineers, I suspect based on what I'm seeing that this is going to burn a lot of people out, as there is significant social pressure both from peers and employers to exaggerate this somewhat. People can have too heavy a workload for a decent amount of time before breaking.

There's just no countervailing force to make these decisions that immediately painful for them. Sectors are monopolized, people are tired and desperate, tech workers are in a basically unprecedented bout of instability.

The situation is super dark from a lot of angles, but I don't think it's really "the overwhelming usefulness of AI" that's to blame here. As far as I can tell, the biggest thing these technologies are doing is providing a cover story for private-equity-style guttings of various knowledge work verticals for short-term profit, which was kind of inevitable given that's been happening across the board in the larger economy, it's just another pretense that works for different verticals.

There are cases where LLMs seem really genuinely useful (Mostly ones that are for and by SWEs, like generating documentation or smoothing some ramp processes in learning new libraries or languages) and those don't seem to be "transformative" at scale yet, unless we count "transforming" many products into buggier products that are more brittle and frustrating to interact with