I think this is the right way of thinking (ie a materialist view, which looks at what an economic system means in real resources), but it's obviously more complicated than a binary choice between "rich people spending all their money on non-productive toys" and "rich people investing all their money into socially useful enterprises".
The invested (saved, not consumed) resources that rich people have won't necessarily go to socially useful enterprises. Instead, they'll probably be invested in things whose main purpose is to create more capital for the capitalist class to invest, not to decrease human suffering. The two things have historically been correlated, but there's no guarantee that this will last forever, and good reason to think that it won't.
At some point (and maybe we've already reached it) we will have enough capital for everyone in the world to live a maximally happy life. Arguably, any investment beyond that point (beyond what is necessary to maintain that capital sock, and perhaps grow it at the same rate as population growth) is malinvestment, since if our goal is to maximize human happiness, additional capital is useless beyond that point, so we should use those resources to do something else.
The obvious problem with this line of thought is determining when we've got "enough" capital, and therefore when we can stop playing capitalism and whack up the gains. Obviously 1918 Russia was the wrong time and place to do that, but hindsight is 20/20.
Another issue is that a lot of our capital stock is not in the form of physical stuff, but institutions, contracts, and relationships that a socialist revolution would actually destroy. The reason Amazon is worth so much money is not because of all the physical stuff it owns, but because of the structure, contracts, and relationships within the company itself allow that physical stuff to be more productive than other physical stuff employed by other firms, and indeed even by the laws that allow firms to exist at all. Any "revolution" will obviously severely disrupt a lot of these relationships, from employer-employee relationships, to government contracts, IP laws, etc. Indeed, that's the whole point of a socialist revolution, but similar things on a smaller scale are faced with almost any progressive policy proposal: changing the social contract to be more beneficial to workers and redistribute society's wealth can actually reduce the amount of wealth in the society. That doesn't mean we shouldn't do it, since less wealth distributed more evenly will probably be a net positive for the majority of people, but we can't pretend this problem doesn't exist. It's a conundrum that I rarely see the Left wrestle with, but I think we need to.