Lots of competing interests with this argument. I live in a beach town that had STRs before we had OTAs. The town has always limited the number of permits and has talked about sunseting some of them. It seems like it is more at the behest of the hotel industry and the few permit holders wanting to protect their captured audience, because they strictly disallow hosted STRs, whether that be an ADU, extra room etc. That said there does seem to be a good balance because you don't really notice which homes are the STRs unless you look for them (most of the time).
STRs also make for a convenient scapegoat for the government when they need to divert attention away from their own policies that make adding more housing units more expensive/time consuming.
That said there are certainly areas where supply is already highly constricted and it can push good people out. Part of the reason why I look for 4-5 bedroom places that need some work, that way I'm not competing with the everyday homebuyer looking for a 3/2. In that sense STR investors can make markets more efficient by picking up housing units that most typical buyers look over.
