Yes, squeeze that marginal profit, please. I was born in communism, and guess what, we did not have 20 flavors of yogurt to choose from, or supermarkets for that matter. In Eastern Europe we counted ourselves very lucky to have plain yogurt, which was rationed.
Joy and happiness aren't the point, those are just nice to have. Putting food on the table is the point.
And having a flavor of yogurt discontinued, out of dozens, due to profit margins, is a first world problem and it affects only the rich.
I was born at the tail end of communism in my region so I haven't experienced the worst parts, but the 20+ years of market optimization in the food space that I actually remember went primarily into variety. There was no point in those 20 years where quality food was scarce or even too expensive for most.
I have people in my family who worked in grocery stores some years ago, when the market managed to optimize these jobs to the point there were a step away from modern slavery. Fortunately, a few large scandals over events like a pregnant employee losing child due to workload made the regulators clean the space up. Today, a chain store employee in Poland earns a reasonable salary and has hard, but not backbreaking work conditions.
There is a point past which things get too optimized, and there is no loss in preventing or reversing that.
You've linked to SSC; Scott Alexander has a whole other essay on precisely this family of problems: https://slatestarcodex.com/2014/07/30/meditations-on-moloch/.