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"Just like anything else, the market will self-regulate. If there is too much automation, it won’t matter how low the production costs get, because without consumers with money to buy the products, those businesses will not succeed."

I do not think that is necessarily the case, due to the pressures businesses face to stay afloat. Imagine this example:

Business A and Business B both compete in the Widget market. Both employee a minimum compliment of Human Workers, along with a whole bunch of robots that can crank out widgets like crazy.

Both Business A and B begin to feel the effects of "fewer consumers" able to buy widgets. The owner of Business B has a flash of inspiration: "If I Hire More Workers, and get rid of some robots, there will be MORE consumers to purchase the widgets we produce. Granted, making them with people, we will produce fewer of them, and at a higher cost, but it will be worth it to have workers to buy widgets."

Now Business Owner A is in business for himself and his family. Seeing what Business B has done, he formulates this plan: "Hey, I will BUY the used robots from Business B, crank out even MORE widgets cheaper and faster than B can, and I will capture a greater share of the diminishing market."

Depending upon how important the "widget" is to life, most of the consumers will opt for a widget of suitable quality at a lower price. Which business will be the first to go under?

So, eventually, Business B will go under, and Business A will capture a portion of whatever customer base B had remaining.

There is no DIRECT business reason to "hire more people".