they realize that meant a real human artist probably didn't get paid to make it so society is worse off
This is a form of the broken window fallacy. Society is not worse off when production requires less labor, any more than it's worse off when someone uses an open source library rather than paying someone to reimplement it.
>Society is not worse off when production requires less labor,
Not objectively in every situation. But that does seem to be the case and objective here.
> Society is not worse off when production requires less labor
Society is definitely worse off when people who exchange their labor for capital have no opportunities to do so
> This is a form of the broken window fallacy.
I’m not sure I see it, can you elaborate?