A lot of good points. I will mention though: giving examples of AI making 'bad art' doesn't mean it's not production ready.
DALL-E/Midjourney has been available to the public for 1 month and there are already indie games being made entirely from its output:
https://twitter.com/Nao_u_/status/1558595111147425792
https://www.reddit.com/r/gamedev/comments/x00s3h/so_i_think_its_a_complete_myth_...
https://www.reddit.com/r/IndieGaming/comments/wkk6e0/finally_got_some_aigenerate...
I would not make assumptions about what this tech can/cannot do. Blanket assumptions like "well it wont be able to do 3D", "well it can't animate" are being challenged literally 4 weeks after release lol