It often coincides with a loss of ownership. If you can't make your own value, and you're letting something else make it for you, you might save yourself labor, but you're giving up your ability to create that value. Yes, the system as a whole will produce more, which is good, but the loss of leverage is an important factor to consider.
There's also a wasting and dependency effect that occurs when too much of a system is automated. If people aren't needing to work on or maintain a system, they don't need to know how it works to use it, pretty much by definition. It's doing the work for them. That creates a dangerous situation where essential systems aren't really understood, and fewer and fewer people end up knowing how to fix things because there isn't the same need to distribute the knowledge of upkeep/understand the work it's doing personally by doing it yourself.
Automation is extremely beneficial, and I'm often frustrated by what seem to be clear cases of not taking advantage of it, but I think what you're saying here over simplifies things.
I think the solution is for more people to learn how to set up their own automation and to automate things without making them too centralized.
