The security of the network is proportional to the amount of work put into it.
If the network wasn't consuming absurd amounts of hardware and energy, anyone could waltz in and use a perfectly reasonable amount of hardware and energy to break it. So yes, it does need to constantly increase as fast as possible. If it ever increased less fast, someone could eventually exploit that delta.
If you have more hashing power you have more chance of earning a block reward to it's effectively a competition for each entity to get as much hashing power as quickly as possible. You can either make the hardware more efficient (and throw away old hardware) or increase the amount of hardware and therefore energy consumption.
If you decrease energy consumption per computation you can afford to buy more miners which then leads to an increase in difficulty and you end up wasting the exact same amount of energy.
If a bitcoin costs $30k then the amount of electricity you can afford to waste is exactly... $30k worth of electricity. Higher energy efficiency is just a competition among miners. Less efficient ones have to stop mining.
If anything that is contributing more to energy waste because you have to periodically replace old miners and not every miner managed to break even on their less efficient hardware by the time the latest hardware became available. It's probably less significant over the long term though because eventually there is a limit to how efficient bitcoin miners can be.
If the network wasn't consuming absurd amounts of hardware and energy, anyone could waltz in and use a perfectly reasonable amount of hardware and energy to break it. So yes, it does need to constantly increase as fast as possible. If it ever increased less fast, someone could eventually exploit that delta.