More over there are probably lots of avenues we haven't even attempted because when the node scales down we get quadratic benefits (right?).
Where as tailored hardware, software improvements are unlikely to continue yielding such payoff again and again.
So the argument that cost of improvements will go up is not wrong. And maybe improvements will be more linear than exponential.
We also don't know that current semi tech stack is the best. But it's fair to argue that the cost of moving off a local optimum to a completely different technology stack would be wild.