Exactly. Life diversifies to fill niches in the environment. Once a species reaches it’s most efficient form in an environment, further mutations are weeded out by the law of the jungle.
No, Darwin predicted life would become more diverse in a stable environment. He wrote that some changes would "be more successful at exploiting an existing environment or adapting to a changing environment". Darwin was an educated man looking at observable data and trying to postulate an explanation, he was neither an atheist nor the Anti-Christ.