Even sticking to that particularly narrow definition, if you give a commission to two artists, one using only stable diffusion and the other more traditional methods, are you confident that you will always prefer the work done with stable diffusion? Even from a purely "this is a beautiful image" perspective?
I think though there's more than just the beauty inherent to an image, a lot of times people buy the artist themself, since their life context and your relationship with them can give you a potentially more meaningful way of engaging with and "reading" the art.
If you pick up watercolors and try to paint an illustration, then pick up oils and try doing the same, then pick chalk, pencils, etc, and try doing the same, do you feel any one of those art tools/supplies make the others redundant or "retro"?
Do you feel art is a technical problem that must be somehow "solved", and once "solved" we can move on to more worthy endeavors?
If anything, it greatly increases the value of human art. (Because it now has more leverage and reach.)