I played a couple back in the day, the issue was mostly that AI games had less effort put into them, it wasn't only the art but the actual stories, gameplay, mechanics that all felt extremely shallow. I tried about 6 AI games total and they all had the same issue. I think if someone actually puts in effort into a game using AI content it might not be too bad, I don't know how far they can get away from the uncanny feeling you get when looking at AI art.
The only good examples of AI art I've seen were in mods for existing sandbox games, where having thousands of characters is not really feasible unless you AI generate them or use 3D models -- I prefer AI generated images in that case over 3D models.