Yes, it is absolutely ridiculous to be going on about "existential threats". It will be somewhat of a nuisance. Astronomy will still happen, data will still be gathered, they'll just have their algorithms remove a few satellites from the thousands of photos taken.

Ultimately this is a problem that indicates its own solution: There's so much stuff up there because launching stuff has got so cheap, comparatively. Since launching stuff is getting so easy we'll be able to pop up space telescopes easier, too.

At a much higher cost, regardless of the advances in reusable rockets. Not to mention much harder to do maintence/upgrades/change instruments.

Arecibo Observatory didn't even receive enough funding to prevent it from colapsing. You can't replace the entirety of ground astronomy with space telescopes even if it got an order magnitude more funding, that also won't happen.

There is a physical limit on how big scopes can be and we are reaching it. Also, other types of astronomy like radio are impacted by the transmissions.