This is based on the assumption that server without those optimizations is not fast enough. That used to be definitely true in the nineties, but hardware is getting faster while human reaction time stays relatively flat. Hardware is also getting cheaper, so throwing a beefier server is a much easier and better solution than investing months of error prone and non-scalable human labor.

Everyone is ditching those beautiful and smart CS principles on FE by switching to hybrid apps, walking entire DOM on every update, etc.

There's no reason same wouldn't happen on backend. In fact it already has - interpreted languages, GC, micro services.

For better or worse progress in software always meant worse efficiency, because hardware was always forgiving that.