This is one of those discussions in which both sides are onto something. On the one hand, the supply/demand argument is specious for tomorrow, because if we were to increase demand instead of cutting supply, the problem would be solved. On the other hand, today there is an oversupply, and the reason OP and the like want to respond by cutting supply rather than increase demand is that they think theory is bunk.
This is because theorists are doing a bad job of selling their subfield to empiricists. Even the most radical theorists, who reject social science empiricism as naive, could, but rarely do, make that argument in a way that empiricists can understand and even respect. Instead, theorists talk mostly to each other, and this makes them as incomprehensible to empiricists as they find empiricists to be. There's a lot of mutual incomprehension and hostility, but since we theorists are in the minority, it's up to us to build bridges, so that empiricists won't go on thinking that their way is the only way and therefore that theory should be eradicated.
Easier said than done. The book someone linked to earlier, Jeffrey Friedman's POWER WITHOUT KNOWLEDGE, does engage with empirical literature (survey research) more than anything I've seen from a theorist. But the acknowledgements say it took him decades to write it, and I doubt any empiricists are going to wade through a 400-page book to see how a theorist reinterprets their findings. Empiricists don't have much time to read long books. And realistically, theorists don't have much time to wade through the APSR or whatever. As long as theory is a separate subfield with its own publication imperatives, theorists will go their own way.
Empiricists should just learn to live with it. Those of us who took theory courses in undergrad or grad school and liked it might be able to point out to our peers that there are a lot of things that we don't understand in other fields, like theory, but that doesn't make them illegitimate. A lot of the anti-theory sentiment is ignorance or a narrow view of science dressed up as sophistication. It's juvenile, to be honest. Maybe we should make more theory mandatory in graduate education so students at least recognize that it is a legitimate enterprise. And since undergrads love theory courses, we could then hire more theorists to teach them, benefitting our departments.