I strongly disagree with this; I believe that an OS should be whatever the user needs it to be. In my case, I am a power user that loves the command line, and while I agree that I may not represent the majority of users, I do not care for your assertion that my way of doing things is somehow invalid.
If we had a giant influx of computing illiterate people, the platform would enshittify. They would move towards android-type lock downs and user hostile stuff. More and more binary-only proprietary software, they might fork systemd etc and make sure that the proprietary binaries only run under certain unmodified setups etc. Of course there would be escape routes to various other, nonpopular distros, so the skilled people would be fine again, but there would be a barrier again.
I think this is fundamental. Once the general public starts entering an arena, it won't stay the same. Eternal September etc.
It's a hard question to figure out what's the proper level of abstraction for this is. And while I strongly resisted it originally, I am becoming more open to the argument that many people don't need to "know" what a file is, to benefit from their computers - that as long as they can "save" their work, and "send" it from one app to another, they'd be able to get all the productivity that they are looking for.
Without the helpful abstraction of files and folders, all we'd have are bytes stored at various addresses or sectors of the hardware.
I agree with most everything else you said, but would slightly push back on that. I actually quite like the idea of non-hierarchical blob storage searchable via arbitrary indexed metadata, as well as the idea of content-addressable storage (e.g. with magnet links). While folders are an elegant abstraction, I really feel that we shouldn't be beholden to it.
On that note, I remember how absolutely ecstatic I was when I first set up Sublime Text and discovered that unsaved editor tabs always reliably survive restarts; it essentially flips the script, whereby I've lost multiple saved files by accidentally deleting them, but I've never accidentally lost work in unsaved tabs, and I've never actually had any interest in figuring out where and how these tabs get persisted - it just works.
The people doing the former use computers for ‘real work’. They are using a computer as an end in itself, care about operating systems and have strong opinions about systemd. The people doing the latter couldn’t give two shits about any of that and just want to get their presentation finished on time.
Problem is, both sets of people have to use the same machines. It’s also why software like GIMP will never become widely adopted in professional environments because it’s designed for a completely different userbase.