The main difference is "lifestyle creep" is an individual problem / choice. You make more, but you spend more of it. Your lifestyle is improved, but there's a diminishing rate of return.

The collective "lifestyle creep" where the consumers are competing can cost everyone more while resulting in worse outcomes overall. Almost like reverse capitalism. Instead of producers / sellers competing (on quality and price), there is just so much demand from consumers that they are forced to sacrifice quality while paying a higher price.