How can the output both be so much worse than what a human could produce while simultaneously taking all the jobs and displacing the human made data it was trained on?

If everyone hates AI output and refuses to buy anything made with it then in what way is it a threat to people who don't use AI in their work?

Are these talking points perhaps crafted to benefit a small group of people who will lose the edge they currently have to a larger number of people enabled by these new tools?

Not really an accurate view, and the conspiracy angle isn't helping.

The output could be fine in itself, except people (arbitrarily, some could say) value the human production. Displacement is simply a matter of volume: the sleepless machine can churn indefinitely while people can not. The thing is too, most outputs being mass produced are of a substantially lower quality than people (and what is possible).

A problem is people are being tricked into it, or being given little choice. If 90% of companies use AI (as in, mandated from leadership), what "choice" is there? If people recognize the 10% remaining and do business with them exclusively, economics will take over and force either price hikes or the 10% to grow. It's playing chicken.

Based on what the trends seem to be, people will unknowingly keep taking in products with AI (mostly out of not understanding the choice).

As for the enclosure point which is important: People make things for their enjoyment. When people try to profit off their work, they rightfully get put off. The deal is "if you can view this for free, it isn't meant to be sold. If it is sold, I deserve to have my time compensated". AI training/scraping has violated this agreement, and funnels the money to a third party to the people who made the valuable originating art. If it was not valuable, then why not train AI on its own output? Since that appears to be a "problem", there must be something about what humans create that has value AI cannot produce itself.

>Are these talking points perhaps crafted to benefit a small group of people who will lose the edge they currently have to a larger number of people enabled by these new tools?

That flavour of conspiratorial thinking is one of the reasons for polarization. Sometimes, people prefer the human touch. This applies mostly to art and other topics lumped into "the Humanities".

Hope that clears things up for you, or at least sheds light on why people might not see things in the way you do.