I have a strong opinion that the problem is more one of people attempting to solve every problem with their shiny new hammer. AI, in the current incarnations, is very good at many things. When implemented properly, LLMs are great at filtering huge amounts of text data or performing semantic analysis. SD does produce images and can be directed.
LLMs are not a replacement for thought. SD is not a replacement for an artist. They are all tools for helping people do things.
I am designing a hypothetical LLM architecture for analyzing the relational structure of a story and mapping it out. I am hoping that it will be capable of generating a meaningful relationship network at the end. It is a very specific goal and a very specific structure. It won't write a story; it won't produce dialog; it won't build a plot. What it will do is build a network of places and characters that can be used to make decisions for all of those things. I want something that helps with internal consistency of models doing other things. So if a GPT model were to write something, it could be fact-checked against the world network to see if what it is saying is reasonable.