I think there is a decent chance that the Market of Lemons incurred thanks to LLMs and such does have a real chance of playing out as described. There are obvious off-ramps that may be taken to avoid the predicted outcome, but those most likely to try and guide users onto those off-ramps are also those most invested in the underlying tech that will lead to a road to nowhere resulting in the Market of Lemons.

One thing I did take exception with is one of his possible influences that lead us to avoid a death of the online interaction. "that AI technologies won't be perfect substitutes for actual human-to-human contact" is, on its face, a compelling argument but the fact is that humans rarely look for "perfect" solutions to anything... especially in the social sphere. There is a non-trivial number of people right now that are using virtual companions driven by the questionably convincing ChatGTP LLM who howled in anger and pain when the company who created and sold the tech decided to alter the companion to be less overtly sexual. Sure, even in a pre-Internet era some of those fixated upon such companions would have found some other evolutionary dead-end but a large number of them would have engaged in satisficing behavior to find another human and reproduced.

What we face now is a noteworthy population of humans that opt out of the complexity of human relationships and reproduction because an over-powered chatbot weaponized their empathy against them and made them a genetic dead-end.

I'm hardly advocating for some Butlerian Jihad, but I would suggest that we need to think about the potential ramifications of a social Market of Lemons that is also operating in parallel with a technology that offers a satisfactory empathetic alternative to that Market that is also a Lemon in the long term for humans.

If nothing else, it provides a neat basis for a sci-fi premise.