HD skins are good for certain characters that have proportions that don't fit in the standard 64x64 format. Like Sadness for example has small eyes and large glasses which can be done with the use of the hat layer, but the problem is that players can see the floating pixels of the trick for making her eyes smaller. Yes she can still be done in the 64x64 format, but when it comes to the size of her eyes and glasses it becomes an issue
I haven't been seeing anything AI generated from what I've seen. I guess it might be because I don't know what an AI generated skin looks like. Yet again I only look for skins and not anything else lol. Good that this is in action now