It seems to me that becoming more knowledgeable and smarter is gradually altering our utility functions.

That's probably down to memes and memetic hijacking. Advanced civilisation results in a greater density of memes, and they have greater say in civilisation's values. These values usually include reduced reproduction for humans - because of the resource competition between memes and genes - thus the demographic transition.

But what is it that we are approaching if the extrapolation of our volition becomes a purpose in and of itself?

As I say, the actual effect is probably down to more memes. If that continues, we'll probably get this.