This is all true, but it doesn't preclude the possibility of generating DNA. Human share a lot of DNA sequences with other animals, and the genetic differences between individual humans are even smaller. You might have trouble generating a human with horns or something, but a taller one is probably mostly an engineering problem.

What GPT-3 and DALL-E shows is that you can infer a lot based on the latent structure of data, even without understanding the underlying physical process.