Ultimately, for me, the question comes down to a few questions: 'should this be banned for moral reasons', 'should this be banned for this website', and 'will not banning this cost anything for the website'.
For this, I'm going to be talking about the general situation. Not exceptions. There are always exceptions, and they should be treated as what they are -- exceptions. For my purposes, the 'general situation' is somebody who is writing something that others will read for free and they have, at most, a crowdfunding platform to obtain money, and most likely not that -- and if they do have it, it's not going to grant them a lot of money.
So.
For moral issues, I don't think it's the place of this website, nor the authors, to be concerned about. Because the issue is bigger than small, independent writers writing things for people to read for free. Ideally, sure, don't use AI art. But for a lot of people, it's going to be 'use AI art' or 'don't have art', and I'm not going to ask a creative to not use what is, for them, a free or extremely cheap option to get art for their personal project that they are sharing for free. Banning AI art will most strongly affect those that do not feel like they have a choice in the matter, instead of those that have a choice, and choose AI.
In terms of this being a rule for the site, I also disagree, but for a more practical reason: It would need people to manually check, determine which is AI and which is not, and there will be mistakes. That means you need to have a team to go over complaints, check, double-check, etc, which I don't think is a fair ask of Scribblehub. Chances are, even if that happens, it's going to be overworked by a large degree -- meaning that the people that are most likely to be have to deal with mistakes are those that have trouble advocating for themselves for one reason or another. Social awkwardness, inability to connect the artist they commissioned with whatever 'team' is running this, and those that did draw things on their own in a manner that look like it was made by an AI. None of those are likely, but there'd almost certainly be at least one.
As for 'costs of not banning it', there is some. I'm not going to pretend that there isn't. But the cost is, I feel, relatively minor. A decrease in trust for Scribblehub as a platform from those that care strongly about AI art in all situations. Amount of trust decrease -- well, it's going to be there. A few users will probably leave, maybe spread some hate on a few websites or to their friends. Not really an expert in that. But as this is not an art website, I don't feel like that cost will be particularly large.
I could be wrong, of course, but I feel -- ah -- medium-to-high strongly -- that banning AI art covers isn't the right move. Maybe add a tag of some sort, at most, that identify which stories have them, but that has its own implementation questions.
For contexts sake, I used AI art for my story's cover when I wrote it a few years ago -- back then, I didn't know as much about the costs and moral issues of AI and AI art as I do now. If I did at the time, I might -- emphasis might -- have tried to get a commission, but given my own social issues, I probably would not have. And if I write another story in the future, I will put in a good effort to getting somebody to draw the cover, as I am in a place, both financially and personally, where I can do so without any great cost or effort to myself.
EDIT: Realized shortly after I posted this that I should clarify something. As Scribblehub is a website for authors, I am judging this question in terms of what is most fair for the authors of this website. I am not judging this question in terms of what is most for artists. That is a valid question that deserves discussion, but not one that is, I think, important for the question of if Scribblehub should ban AI art covers.
