Don’t mix up causation and correlation. Of course a big budget movie now uses VFX everywhere. In the past, that was relegated to a few scenes. The VFX budget (percentage) wasn’t necessarily much different though. The growth in profits is almost certainly attributable to the growth in foreign markets like China. The domestic market hasn’t grown in twenty years.
Now, you may presume the Chinese won’t go to see US movies as much if there was less VFX, but the current growth is due to relaxed government policies. Some even argue the Chinese market is ruining Hollywood movies. The other foreign markets have always swallowed up whatever the US produces.
I agree that we might have better movies if all movies were Richard Linklater Before Midnight-style dramas without VFX spectacle - but since “fooling yourself” seems to be your favourite term, I think we’d be ‘fooling ourselves’ if we claimed that Hollywood would still make Titanic/Avatar/Star Wars profits if VFX would disappear. 
I’m not so sure about that. If VFX would disappear (which is of course absurd, just an extreme example), the size of the audience would still stay the same.
Sure enough, you’d never go see ‘Transformers’ or ‘Avengers’ without all that VFX, because without the VFX these movies are nothing. You’d go see another movie instead. However, movies like Star Wars or LoTR could work with much less VFX (and they already did, compared to those other films). One particular scene in “Hollywood’s Greatest Trick” shows how the actors now get their final makeup through VFX. I think that’s terrible.
Nobody’s asking Hollywood to become unprofitable - just to make sure that VFX studios can be sustainable. Indeed, everyone could use a bigger piece of the pie but at least screenwriters and DOPs don’t go bankrupt for Oscar-winning work. They have their labour rights sorted out by their respective unions.
These things were sorted out many decades ago, in a completely different Hollywood. Interesting story, but besides the point, that work is just too different. You can’t replace a writer or an actor (or even a caterer!) with some guy sitting in Canada or India.
It is important for whether or not a movie grosses a billion dollars. A film doesn’t make hundreds of millions or a billion because it got made, it’s because a ton of people want to see it. And I don’t see Lars von Trier’s Festen breaking Avatar’s box office soon.
Again, correlation and causation. If everyone is cranking VFX up to 11, then of course all the most successful movies will also be heavy on VFX. If everyone starts dialing down again, that doesn’t mean the most successful movies will be less successful. Regarding CG VFX, the top grossing movies of all time (US) didn’t really have any (except for Titanic).
You can be ideologic without being utopian. Capitalism, specifically neoliberalism is an ideology - and currently a very dominant one.
Well, I already told you that my ideology is “utopian”. I absolutely don’t believe that the free market solves everything. I’m not telling you how things should be, but how I see them.
I don’t understand why it was realistic for all the other areas of the movie industry to unionise but for VFX it suddenly is unrealistic and one would be fooling themselves if they thought the VFX industry could and should unionise.
Again, in the film you posted, nobody makes a good argument on how it could work, even though everyone shares the sentiment. The problem with this type of work is that it is easily outsourcable, in large parts. That’s an issue many parts of the economy have. Unionizing can not solve that problem. Maybe Donald Trump is gonna do you the favor of making outsourcing less profitable…
As somebody with a keen eye for VFX you may make the mistake of believing that audiences deeply care about the difference (or even can tell the difference) between AAA work from the US and B+ work from India. Just take a look at Enthiran,which has tons of VFX, at a twenty million budget. The quality is on par with what Hollywood did fifteen years ealier, but they’re catching up.
