Your observation
That is the way it works: Finding that point where prices, quantities, supply and demand maximize profits. Yes those companies overshot and by pulling back the price, they make higher profits because they sell nore.
This is intuitive. If the price of a loaf of bread were $1000 almost no one would buy bread and profits would be nothing. If the price were a penny they would be selling out every day but the profits would still be next to nothing. Finding that sweet spot where profits are maximized is what the concept of S&D is all about.