Your overall point isn't wrong, but...

> Bakeries radically undercut the cost of home baking

This is not always true anymore. I bought a (nice, expensive for its product category) bread machine on Amazon for something like $300. I can bake a loaf of spelt flour bread with nuts and raisins for ~$2 in ingredients at unoptimized grocery store prices. The more-or-less same loaf from a bakery would cost me probably ~$8. Now, that loaf from the bakery would be nicer - artisan etc. - but the bread machine gives a nice crust, I slice it up to throw in the freezer anyway, and the bakery loaf isn't worth the premium to me. I'll see a return on my investment in about a year.

Industrialization should reduce prices while improving quality. In many cases this is true. But it's worth it, sometimes, to have the actual numbers in mind, in case the industrial producers start to forget that they are competing with home processes and raise their prices without consideration. Sometimes, owning your means of production will be cheaper than paying someone else to pay R&D, rent, labor, and marketing.