I agree narrative (and contextual) elements are critical to aesthetic enjoyment. It can be nigh-impossible to effectively judge a work of art purely on technical merit, as people desire and expect it has 'something to say' - a pragmatic purpose.
However, many of our narrative characters already are at least part-fiction. I mostly agree with you, but I also suspect that generated art could be attached to narrative characters in a shared fictional cultural anthology to achieve the same end. For example, if someone created a FakeDrake character, and wrote stories about them, and a following around FakeDrake popped up, that character would serve a narrative function and the work of that character could be perfectly authentic. One might expect that the work being secretly produced by a human instead of machine would be viewed as a form of inauthenticity.
However, many of our narrative characters already are at least part-fiction. I mostly agree with you, but I also suspect that generated art could be attached to narrative characters in a shared fictional cultural anthology to achieve the same end. For example, if someone created a FakeDrake character, and wrote stories about them, and a following around FakeDrake popped up, that character would serve a narrative function and the work of that character could be perfectly authentic. One might expect that the work being secretly produced by a human instead of machine would be viewed as a form of inauthenticity.