Every single game dev on Earth has been thinking that since the very first GANs, but the state of the art when it comes to generative AIs that are actually useful for asset generation is still pretty bad.
Much like LLMs are still pretty bad at logic. It seems like we're plateauing in that regard...
The thing about assets is that they have to be coherent with each other. You can't just generate them one at a time in a bunch of different styles and sizes or they'll look terrible. In the simplest case you want to generate at least an entire spritesheet for a single character or object. And that's still fundamentally impossible with modern generative AIs
Consistency was for sure the biggest issue when I tried this approach last time. Also most of the images were a bit off, like having misaligned limb or some visual glitch. Sometimes fixing those details can be harder than drawing some crappy image from scratch.
I really wish there was a tool where I can select the theme, which objects I need and it would spit out some half decently looking art. I even don't care if it was some simplified, cookie-cutter art as long as it was low-effort and consistent. It could be a real time saver for prototyping.
The "barely" part may be important and I would like to know what others are doing.
I get that people do it anyway but I guess it's kind of a grey-area because it's hard to tell after the fact that some snippet has been copied from SO.