I don't see anything wrong with using AI to generate art in pet sites but it should be done in moderation. Overusing it will make it less appealing because human touch and creativity is needed.
Honestly, no. If it's used to generate art, it is not a good idea. If it's used to streamline the process and uses your own art, maybe.
But, I don't see AI art being a good idea at all in the basis and foundation when it pertains to the virtual pets industry. This industry has strived for the past 20+ years with actual artists being at the for front of creating art for every single pet site that's online today. If we take that away from them, then you can kiss a lot of creators good bye. They're the ones that have created adorable pets, items, and more that we have grown to love over the years.
Without the talented artists, I don't believe pet sites would be as big and successful as they are today. They are the sole reason along with the very talented programmers that have helped make this industry a big successful one. We owe it to the them to not bring AI generated concepts to this industry at all. It is disappointment all around as AI is not art, it is not actual creation. It takes away concepts from other creators and steals concepts from those that have spent tons of time creating.
Sure, video game developers are using it, but they want to save money and be cheap, but that's because they'd rather push games out a lot faster. However, they have talented artists on board that can spend creating art for their games. They shouldn't be doing it either, but they art. It is ridiculous, it shouldn't be done.