If we take your argument to it's logical conclusion, all progress is inherently bad, and should be stopped.
I deposit instead that the real problem is that we tied people's ability to afford basic necessities to how much output they can produce as a cog in our societal machine.
Yes, because if you depend on some overarching organisation or person to give it to you, you are fucked 100% of the time due this dependency.
If AI replaces millions of jobs, it will be a net negative in job availability for working class people.
I agree with your last point, the way the system is set up is incompatible with the looming future.
There is no similar net creation of jobs for society if jobs are eliminated by AI, and it's even worse than that because many of the jobs are specialized, high-skill positions that can't be transferred to other careers easily. It goes without saying that it also includes millions of low-skill jobs like cashiers, stockers, data entry, CS reps, etc. Generally people who are already struggling to get enough hours and feed their families as it is.