A few points on this from someone who's been building websites for 25 years (I started around when images were added to HTML) -
The web designers don't hear from many of these previous prospects who now go straight to Squarespace.
When people come to me for a Shopify site, it's usually because they've done all but the hardest 10%. Then they want to pay me a tiny amount to do the most unpredictable and difficult 10%. Usually something custom/difficult within the parts of the platform that are locked down.
I've seen budgets from local brand-name companies go from $20k for a build to $2k.
Often, the people charging $10k for a Squarespace site are justifying the majority of that with related services (copywriting, photography, content, marketing, etc). Many surviving web companies needed to become agencies. Shopify has some automated marketing options now. Copywriting is increasingly done with ChatGPT/similar.
Don't get me wrong - this is all very liberating for the client side and a boon for platforms like Squarespace and Shopify, but don't underestimate the upheaval for web designers.