I would guess it's most likely both. The world could use a lot more software but it's not an unlimited appetite and the increase in productivity of SWEs will depress wages.

Just like chainsaws depressed the wages of lumberjacks, and cars decreased the need for people to move around.

Only if there is something for that software to do.

How many places have you worked where there's no backlog in Jira and the engineers legitimately have nothing to do other than sit around waiting for work to get assigned ‽