Human wanting and economic demand are not identical. In order for human wanting to turn into economic demand, those who want need to have money (in a capitalistic society). If there are limited numbers of jobs and limited forms of need/want-based income redistribution, then demand is limited.

This ignores diminishing returns of additional labour and consumption.

If we reach the happy situation where robots are providing us with the things we need for a good life almost automatically, why would we continue to work ourselves to the bone for additional goods and services that won't increase our happiness much? Most people would rather just work less.

In fact, our current level of economic output is enough to give every household a comfortable life, even if we worked substantially less.

Unfortunately the system is structured to maximize labour time, keep us economically insecure, and use us all as grist for the capitalist mill, rather than maximizing leisure time and quality of life.

Demand is ultimately limited by human attention. There is only so much time someone can spend buying goods and services, especially if they intend to actually do something with them. And the demand for each individual product is far below that. There are some products virtually everyone will buy, but usually only once in a certain timeframe. Then there are specialized things like combines or milling machines where demand only goes up if some other industry expands.

If you improve your factory equipment to produce double the items per employee-hour at a lower unit cost, you likely won't see the demand double in proportion. Most likely you'll just eat into the market share of a competitor. Maybe some new customers will newly be able to afford the product, but once it has "taken for granted" status, even that is impossible.

And we are not increasing the number of these "taken for granted products" very quickly. As far as physical products are concerned, I can only think of the smart phone as a recent example; actually that decreased the number of those products, by obsoleting cameras and dumb phones for most people. Among internet services, advertising is the dominant money-maker, and that's a zero-sum game for eyeballs which only employs a relatively small number of people.

As more and more products and services are provided by machines, fewer and fewer people become necessary to keep things running in the background. Sure, some of the replaced people can try to come up with new things to offer, but most of them won't succeed, and the vast majority will eventually be unable to cost-effectively provide value to other humans at all.

At that point, we'll find out whether it's cheaper to feed them or shoot them.

I completely disagree.

It has been a while that demand stalls. We can see it by observing that energy (time, investment, ...) doesn't go much any more to production means, but to advertisement, marketing, new forms of distribution, and so on. Production is enough in many domains (and there is no room for newcomers, it contracts rather than develops, you just compete to take shares from someone else, not that much to contribute to a booming market), the current problem and aim of companies are to invent ways to get people to consume more and more stuff.