I agree that multiple devices increase bandwidth demand. But that doesn't invalidate the law of diminishing marginal utility. It just shifts the point where diminishing returns begin.
For example if your household only peaks at 300–500 Mbps across all devices combined, upgrading from 1 Gbps to 10 Gbps doesn't make Netflix look better, web pages load noticeably faster, games lower latency or Zoom clearer. The extra 9 Gbps sits idle most of the time.
Eventually the bottleneck becomes the devices' Wi-Fi, the websites, the streaming service's bitrate limits, the game servers, storage speed or simply the fact that people can't consume data any faster. Unless you're regularly transferring massive files or serving hundreds of users the practical benefit becomes very small.
More devices does justify more bandwidth but they don't eliminate diminishing marginal utility. They simply move the threshold higher. For most households 1 Gbps is already beyond what they can meaningfully utilize most of the day. Going to 10 Gbps is often buying capacity that remains unused.