Not just the tech industry too. There are plenty of areas of STEM which are totally saturated with smart effective highly educated people and the result is low wages and poor employment outcomes. Just look at chemistry or biology.
I worry more about quality going down than either of those. Companies will amass huge armies of truly awful engineers and it will become a profession of attrition.
Not to mention that we will motivate foreign students to study mostly only STEM and thus deprive ourselves of the diversity of thought and the artistic and critical labor output of foreign workers in non-STEM domains.
Makes me think of Arcade Fire: "One day they will see it's long gone."
The tech industry isn't zero-sum though, even from just a purely selfish "can I get a job" POV. More talent in the pool will arguably make the industry bigger, rather than diluting the value of that talent. There's just so much room to grow.
But fewer complaints of H1-B wage slavery (note: I'm exaggerating somewhat), which also suppresses salaries. Hard to say which is more significant an effect.