I'd just describe this job market as competitive and every company appears to be looking for some specific persona now. Believe it or not you could thrive in this job market. For you, I'd say you'll have figure out what you love to do, figure out how to speak positively/enthusiastically about your previous experience, and find companies that value what you bring to the table. AI is not taking all the jobs yet (seems clear that it produces garbage code that's untenable at scale), and neither is off-shoring (it's very out of trend).

Question - what can you actually control about companies you're applying to? The answer is not a whole lot, so why stress about it? What you can control is a funnel:

1. How many jobs you've applied to

2. What quality those companies are

3. How much they're aligned with your skill set

Other than that, you're stressing about stuff you can't change. Let it go, gain inner peace. There's a lot to unpack in your post, step back examine the stories you're telling yourself. Are they actually real? Is there something more nuanced going on?