However, the very fact that so many people feel so unfulfilled by life is evidence that some sort of enormous trade off has occurred and is being missed by our metrics. People are eating themselves sick and scrolling themselves stupid in seriously detrimental ways. The old sources of meaning (families and communities) have been eroded and replaced with nothing.
This is very wise. I don't know that there's an easy answer, but I think the quest to step back and ask: wtf is all this actually for is well worth doing. We talked about this in some sprawling comment thread, I think about externalities: the market works its magic for goods that can be priced appropriately in the market. For everything else, we have no reason to expect optimality, and indeed, we don't get it, for the reasons you say.
I think the "happiness economics" movement gets undeserved mockery for this reason. A developed nation filled with miserable fucks who become addicts at record rates, obese people who live longer, miserable lives full of self-loathing, and people living hollow lives FOMOing their friends on social media -- this is not an unadulterated success story. Previous generations would not have considered this state of affairs to be a triumph.
I don't care what GDP says. Figuring out how to talk about this in a sane way would be a Good Thing.
One of the things that attracted me to Bitcoiners is the attention paid to how much of life is "fiat". While I think this is often take too far, I like that people are questioning whether all these expectations and institutions are actually providing value. The optimist in me, thinks we'll rediscover those things that make life meaningful. (The pessimist in me thinks we're already on a runaway death spiral.)