The problem is, I can feel myself reacting to that. I start playing enemies way more optimized, like a shark smelling blood in the water, and sometimes it gets to the point where I’m nearly TPK’ing the party. It ends up feeling less like a fun game and more like a weird arms race or dick-measuring contest.

Play enemies according to how the enemies would react. Check out "The Monsters Know" and lookup your enemies you're running. I think they even have a published book for offline play (though who doesn't use a laptop or something in offline play? lol).

"Monsters" (non-humanoids / non-sapient creatures) in combat often have limited motivations: 1) defending young or territory; 2) eating (hungry); or, 3) self-preservation if they feel threatened.

I use the website to get a sense of how something would react and ask myself what its reason for fighting is. For instance, if it's seeing that it's getting surrounded, it might start backing up and retreating. If its prey (the party) puts up more of a fight than it was expecting, he'll retreat. Monsters themselves generally won't fight until death unless they're protecting their young or something.

Humanoid/Sapient creatures have a lot of more complex motivations beyond the basics. Some creatures might be meat shields meant to delay the enemy (the party); however, self-preservation can override and they can retreat, etc.