First, I'd like to correct a fact you omitted: Napster, Limewire and the like didn't come out of nowhere. They were created because artists and their recording companies forced consumers to buy entire CDs at inflated prices that kept rising. Now, what they got in return from their consumers after that wasn't fair either.

I don't think making AI generation illegal for everyone makes sense. That's how you get the Metallica's of the world bank-rolling professional grifters to hold people's grandmother's financially hostage.

I do think it makes sense to bar AI generated products from making money if the works used to train it did not belong to that company or individual. If you create a program using CoPilot, you should not earn money. If you make a comic using Stable Diffusion, you don't deserve money. This keeps the power players in check while allowing artists paths to use these AIs if they own their own work outright. Imagine if you could train CoPilot on your own code and then use it to help you. That to me sounds like the framing for a new and responsible form of innovation.