Glad to see Tapas doing this. I don't think I've seen anyone use AI-generated art for a novel cover here, but I see it a lot on another site.
I don't have as much of a problem with AI art used recreationally. I've used Artbreeder and other things like that just to get a feel of how my characters would look in a different style. But I do find the current state of AI art lacking on a purely visual level. It's good enough. You're not going to get any standout character or environmental designs from it. The AI-generated covers I've seen lack personality.
That being said, I do feel a little sympathy for novelists who rely on it for covers. Part of my motivation for honing my art skills is because I can rarely afford commissions. For any writer who's in the same position and doesn't have the artistic skill level to make a a cover work (especially on Tapas where drawn characters on covers are encouraged), I understand why they would turn to AI art.
People do unfortunately judge books by covers. If potential readers think the art/lettering on it looks bad, they're going to assume the writing is the same. I've read some pretty decent stories that I wouldn't have touched if I were just going by the cover. So, even if I think AI is just "good enough," that might be enough to take a potential reader from "This book looks like a child made it, I'm not going to waste my time" to "This book looks decent enough, I'll probably check it out."
It's still refreshing to see Tapas take this stance, seeing the direction other visual art-focused sites have taken. And personally, I think even a "bad" hand-drawn cover is a little more appealing than AI.