Yes - specific faculties atrophied - I wouldn't dispute it. But the (most) relevant faculties for human flourishing change as a function of our tools and institutions.
Because of the "wasn't that bad" part. The point is that growing up in the presence of LLMs may well diminish specific capabilities of the users. But that on balance, future generation with newer tools don't find themselves 'stuck'.
> People would have said the same about graphing calculators or calculators before that. Socrates said the same thing about the written word.
If the conclusion now becomes “actually, Socrates was correct but it wasn’t that bad”, then why bring up Socrates in the first place?