@emilymbender
The frustrating thing for me is how much of "old fashioned" machine learning gets lumped in to "AI" conversations these days, and then its (very real) usefulness gets used to prove the value of "AI," which is then used as an umbrella defense for setting LLMs on bullshit extrusion mode.
Even language models—possibly even large ones!—are very useful for translation, transcription, captioning, first passes of text annotation. i.e., jobs that involve interpreting language and language and doing language things with them.***
As you say, it's the generative nature of them—asking them to create or respond with meaning that wasn't in the input text itself—that starts the spiral out into resource-sucking noise.
(***maybe this sounds like the "middle ground" you're decrying but I think drawing a hard line at novel generation cuts off most of the hype nonsense.)