I'm unsure the defense industry analogy is correct, although fewer hires does matter. Instead of hires, some people (often deeply unqualified) are now building software for spec to sell to industries that might be charmed/but unqualified to judge the software. Other's making software for their own personal productivity, with self monetization ambitions, often copying what seems useful to others. It's unclear whether there are fewer people working on software, or just bigger monolith companies shifting engineers to take on a more entrepreneurial role. That can mean trouble for the larger software companies.

You could (many have) make the same argument against higher level languages all these years. If no one actually knows assembler and metal networking (or GPU for that matter now) protocols, they can't possibly make optimized/knowledgeable architecture decisions. The only people allowed to program should be compiler contributors.