Funnily enough, I'm excited for new dialog in video games using generative AI. It would be nice for random NPCs to not have the same 3 recorded voicelines, but to actually change what they say based on what's happening around them.
But that's obviously a limited use for AI. It should definitely not be used to lengthen the game and clutter up storylines as you're kinda describing.
I thought I'd miss my headphone jack a lot more, but I can't even recall the last time I've needed it.