It has so far. We might have expected the massive gains in developer productivity over the last 70 years to have resulted in the demand for new developers slowing down at some point, but it hasn't.

Recently there has been an explosive transformation from software as a user and productivity focused industry into an adtech one, which has increased demand temporarily.

In a very typical way, more supply just gets eaten up by more demand

Sure, but increasing supply also means decreasing price by that same model. Decreasing price means less money for developers, meaning less people are incentivized to become developers, leading to equilibrium. Of course, that's a very simplistic model.