What does the Time Traveller feel is an unexpected consequence of a civilization that has no wants or hardship, and do you agree?

This part of The Time Machine seems to be a satire on the utopian ideas of the time it was written, which concentrated on the elimination of all work and effort from human society, "the machines, our new race of slaves," and the idea that enormous surplus value was being unfairly appropriated from the system by capitalism that could be made available for the benefit of all given some social engineering. 

If you read George Orwell's journalism in the period before he wrote Nineteen Eighty-Four, you can see that the unreality of this type of dream was almost an obsession with him. In another of his books, I think it was The Road to Wigan Pier, he characterized the "progressive" thought of his time as a mad dash toward a goal that people hoped never would be reached, because it would be too boring. It is a little bit unfair, given this criticism in The Time Machine, but most of Orwell's criticism takes H.G. Wells as the chief author of "rush to corruption" utopian thought.

It was in reaction to this type of thought, and the feeling that it could not motivate a ruling class, that inspired Orwell to define the aim of the Party in Nineteen Eighty-Four as a desire for power and a pleasure in causing pain to others to affirm that power. He made O'Brien, the Party spokeman, denouce utopianism of the Wells kind and admit that the Party only felt alive when crushing its adversaries -- and thus, the struggle would never end.