AI generated images, in my mind, can have two big ethical issues. One is if you ask the AI software to generate an image "in the style of" some known artist. That will produce an image which is obviously mostly based on the works of this one artist, and will be similar to his existing artwork as to be able to compete with it. For example Phil Foglio and his wife produced a lot of very distinctive artwork for Magic the Gathering; it would be unethical for WotC/Hasbro to make new Magic cards using artwork "in the style of Phil Foglio" created by AI, and not pay Phil for it.

The other ethical problem of AI images is deepfakes, like the Taylor Swift deepfake pornography from earlier this year. Besides the aspect that the creator of such an image is trying to deceive others into believing something, which in reality never happened, there is also the aspect of the deepfake using images of a specific person; that person has certain rights regarding his images, which the AI image violates.

But if you ask an AI for a generic image with a generic description, e.g. "draw me a goblin pirate", I don't see the ethical problem. The resulting image is a composite of many different works from many different artists; it isn't fundamentally different from an art student painting an image, inspired by whatever artwork he studied during his courses. If we talk about an art movement like impressionism, that is because the artists in that movement were inspired by each others works. There are obvious similarities between the various paintings of the same art movement. Nobody ever questioned whether that was ethical, or demanded copyright compensation for the artist who inspired his fellows.

Indie game developers, whether for board games or computer games, most of the time aren't great artists themselves. Their interest is in game design. Why would we want to force the game developer to draw that goblin pirate himself, badly, or to pay an artist to draw a goblin pirate, increasing the cost of the game, when instead he can get a perfectly viable goblin pirate for free from an AI? As long as the image isn't copying anyone in particular, but is just generic, I don't see any ethical issues here. I don't think that artists have a right to be employed any more than somebody from all the previous professions that have been made more or less obsolete by new technology. I might as well complain that the board game uses printed components instead of hiring a monk to draw every card by hand.

I believe that AI software should block requests to draw images "in the style of" any specific artist, and not accept names or photos of a specific person to base its AI images on. But companies that want to go for a distinctive art look for their game will always hire human artists. AI is a perfectly viable solution for creating generic images for games.