Preface: I don't think full WFH will happen after COVID, I think companies will try it and slowly end up reverting back to more of a partial WFH schedule like Microsoft just announced, for a number of reasons.
That being said, I agree with you here. I our current work situation right now is causing a ton of stress and mental health issues, but COVID and our current political climate have a much bigger hand in that than just the WFH part. What WFH looks like right now is not what a 100% WFH lifestyle would look like in a year or two. I've had the ability to WFH when ever I wanted for the past 4 years and I can tell you, my current WFH situation is much more draining that it ever was before.
I think your video game analogy is pretty spot on. There are problems with 100% WFH, but "mass mental health issues" just seems like a boogieman.