None of the options is compelling. For stories, I'd prefer no images. A cover image is fine, and AI art might even be a good choice unless you commission a drawn image. The style would depend on the kind of story. Personally, I don't like AI-generated stories, though I don't mind if authors use AI as a tool. While there are certainly issues created by the rapid speculation-based growth of the industry, it seems the arguments are often rather emotional and incomplete. I'm rather sure that if I spend an hour creating AI images, I would use up less energy than gaming for an hour.
The answer is... it depends. I don't care what tools you use. I need to like the content and believe that you spent some of your own effort and had artistic vision. Merely generating some slop and posting it... We can generate some slop for ourselves. Please, stop. It may be hard to differentiate lazy copy-pasting of outputs from genuine work that uses LLMs... but it means you failed to produce something better than raw slop. Oh, and the environment argument is silly. Gaming on top settings or watching a stream in 4K also consumes a lot.
