When twitter became x they switched to basically the same limits Instagram has, I don't think this is a particular failing of Elons, even though he might have many.
Restricting content from AI is the big messy debate we're going to see over and over for the next who knows how many years.
Twitter's strategy was to keep the platform very open and inviting, in order to make it relevant. This included having a relatively unrestricted API compared to other platforms.
I don't know if this was successful or not. Ultimately they convinced someone to buy the platform for $44bn, so I guess you can say it was. That buy has locked the platform down more, and the new version certainly feels less culturally central and relevant than it used to.
Restricting content from AI is the big messy debate we're going to see over and over for the next who knows how many years.