If we take your argument to it's logical conclusion, all progress is inherently bad, and should be stopped.
I deposit instead that the real problem is that we tied people's ability to afford basic necessities to how much output they can produce as a cog in our societal machine.
Yes, because if you depend on some overarching organisation or person to give it to you, you are fucked 100% of the time due this dependency.
If AI replaces millions of jobs, it will be a net negative in job availability for working class people.
I agree with your last point, the way the system is set up is incompatible with the looming future.
Or we're all talking about and envisioning some specific little subset of artists. I suspect you're trying to pretend that someone with a literal set of paintbrushes living in a shitty loft is somehow having their original artwork stolen by AI despite no high resolution photography of it existing on the internet. I'm not falling for that. Be more specific about which artists are losing their livelihoods.