I'd say more "select from" than "churn out". It's not about generating a hypothesis, it's about having a collection of hypotheses and deciding which should be your default until additional evidence is provided.

Hanlon's razor says "Never attribute to malice that which is adequately explained by stupidity", and "adequately" is pulling at least as much weight as "never". If stupidity becomes a less adequate explanation, nothing stops you from considering malice as an alternative.

People use things wrong all the time, sometimes the vast majority of the time (e.g. "literally"). Just because people use a concept pseudologically doesn't make it intrinsically pseudological.