I have also experimented with generative AI and 100% agree, though how far in the future it will be before they are good is really dependant on how quickly it can advance.

As it stands it is pretty impressive and can output some truly creative things, but for anything specific, and especially as something for NPCs, its only really good for incoherent blabbering schizo characters, and that may even be pushing it. RNG with a string dictionary and some sentence structure rules might be more controllable in what it can do.