I mean, to be fair: the biggest problem in the games industry right now is that way too few games are being produced. We desperately need a way to generate more low-effort, zero-inspiration slop. That would be a solution to - something - if it worked. Right?

It’s just the Dunning-Kruger effect again. If you don’t have experience in a field, you don’t recognize how shallow AIs understanding is.
The reason AI is so successful is because we are all unexperienced in most fields.

Crazy thought: how about replacing executives with humans but competent ones?

It’s fomo. Business people expect to get rich(er) from ai so they want it to be real and that overrides any common sense. Your hairdresser is worried about ai so there predisposition is negative

Not wishful thinking, most libraries would have to adapt their licenses and that would be a good thing for everyone involved. There may be some libraries for whom the games industry is not important enough but then alternatives would emerge.