I don't think your "correctly" parenthetical is apt — you are proposing that demand is infinite and therefore supply and demand does not apply. Clearly demand is not infinite because prices are finite. Also, if demand can eat up all of the supply, you are still supply-limited. That is supply and demand in action — you're imagining a scenario in which supply is still very constrained and claiming that prices will stay high. I agree! Supply needs to be less constrained than that to lower prices, which is kind of the general thrust of the YIMBYs.

Yes, rent control distorts supply and demand, leading to higher prices.

Land will eventually constrain, but at the moment SFBA has tons and tons of unused air that is kept off the market by zoning.