If the problems are solved, wouldn't you rather all those programmers use their productive systems-oriented brains on other problems?

Yeah. But, unlike China, the West doesn't seem to want to invest very much into real-world engineering. Except maybe military for forever wars, which is ethically way worse.

This is a side effect of capital accumulation. There's no one to buy the products (as low/middle class gets squeezed) so no reason to invest. Instead, oligarchs hold money in assets and compete over control, ultimately with violence.