Disappointing, but somehow inevitable.

"This will enable us to release the vast majority of games that use it. "

So it sounds like the floodgates are opening and now it'll be up to the users to sort out the flood of BS. None of this is truly surprising, while I'm not cynical enough to suggest their temporary stance was a quick way to score some easy points with the anti-AI crowd, we all kind of have to acknowledge that this technology is coming and Steam is too big to be left behind by it. It stands to reason.

I also understand the reasoning for splitting pre/live-generated AI content, but it's all going to go in the same dumpster for me regardless.

I certainly think it's possible to use pre-generated AI content in an ethical and reasonable way when you're committed to having it reach a strong enough stylistic and artistic vision with editors and artists doing sufficient passes over it. The thing is, the people already developing in that way would continue to do so because of their own standards, they won't be affected by this decision. The people wanting to use generative AI to pump out quick cash grabs are the ones that will latch onto it, I can't think of any other base this really appeals to.