I think that in artist community there is some type of allergy towards AI, but I still think they do not compete with each other, and AI can have a use case. And this jam is a great example, yes theoretically you can be extremely talented in programming, storytelling and art. But in most cases people are not. So yes, theoretically I could commission +800 (for example) pictures from the artists, and they would look great, but no artist will be so fast this would cost a lot of money.
Still, AI makes mistakes, art looks kidna the same etc etc, but this is a better alternative when you can't afford to commission art. AI art is better than no art at all. And I say this a regular user, there are a lot of text-based games and playing them is very painful for me, I recognize that AI art is not a quality art, but for my brain it's better than nothing. (I have very bad case of aphantasia lol xddddd)
Great example is Redemptions Keep, almost all art there is AI generated, and without it, it would have just a plain text, and only this changes this game for me from "painfully playable" to "very enjoyable". I'm just asking you to look at it from the perspective of people like me.