>> a future in which capital concentrates even further into the hands of a few technological elite who make their money off of flouting existing laws and the labor of thousands

I think this is the central issue and is not limited to just AI generated art. Wealth concentrates to the few from each technological development. When robots replaced factory workers, the surplus profit went to the capital holders, not the workers who lost their jobs. AI generated art will be no different but I don't think it will replace the creative art that people will want to make, just the art that people are making to pay the bills.