Is all that complexity necessary? Haven't we learnt that doing things in Latent space is effective as compared to Pixel space.

Sure it isn't. It's like taking a 2026 car and decrying all that complexity is necessary to haul cargo down a beaten path.

It's not. Two wheels and a box made out of whatever you have handy that's stiff enough is all you need. Everything else in a modern car is efficiency, safety, appeal to users, and a whole lot of details that only reflect our current economical and technological constraints of building things. 99% of the technical details of a car is about something else than the "primary goal".

Biology, even more so, is complex because of the way it's constructed (lots of tiny, independent, self-replicating machines) and how it adds up to a functioning organism.