When people on UBI refuse to not riot - see France.
I think the humans still have quite a chance to overthrow a police state tyranny.
But what you say also gives us a path back to economic relevance: you can make money by selling policing equipment to increasingly paranoid states. They'll never be satisfied with what they already have. It doesn't even have to be a useful product, it just has to satisfy their paranoia while also fueling it.