It does have real benefits, but also, of course, all of the downsides you mentioned.

The best analogy is the outsourcing / offshoring fad of the last decade.

Managers hated that senior developers were getting highly compensated (often higher than the management class!) and pounced on every opportunity to replace expensive people with (much!) cheaper options, quality be damned.

For the few companies that paid attention to the quality, this worked out swimmingly. Apple is probably the best example, they've outsourced almost all of their manufacturing to China and other similar countries.

So yes, my mental picture is that every manager is drooling right now because they think they can replace someone getting paid six figures with an AI that costs six dollars a day, if that. A virtual employee that doesn't talk back, doesn't argue, doesn't question, doesn't go off on "unproductive tangents" like refactoring (whatever that's even supposed to mean), and just pumps out code 24/7 like a good little slav... employee.

The very rare smart managers out there are looking at this more like the transition that happened to architect firms when CAD became available. They used to have a dozen draftsmen for every architect. Now there are virtually none, I haven't even heard that job title being used in decades! We still have architects, and if anything, they're paid even more.