Ironic, since "Data Engineers" are probably far more in demand right now than "Software Engineers".

Only in places silly enough to believe software devs/enga cannot write SQL.

The "write SQL for ETLs all day" job is a risky one right now since LLMs really lower the barrier for dealing with gnarly SQL. So it's still not a bad time to have your resume be as clear as possible that you're the "deals with complex distributed systems" SWE type instead.

That's more of an analytics engineer role. LLMs lower the barrier to entry, but popular SQL queries are about correctness and flexibility and this often requires deep understanding and ownership of each filter and window function. This lower barrier can quickly can turn into enough rope to hang yourself.

Why would a software engineer not be able to do both roles?

They can, but it takes time away from software engineering.

Along the same reason, that's why there are DBAs, dev-ops engineers, etc...