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Valve: Most games made with AI tools are now welcome on Steam
(arstechnica.com)
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Oh, totally. I didn't mean to imply otherwise.
Personally I'd love to see a new take on Daggerfall using AI for features you mentioned (though it would have to be an "all in" affair as Bethesda's approach to randomly generated content these days is... not particularly impressive).
I was imagining Oblivion with AI elements, but yeah! Open world RPGs seem particularly suited to this kind of thing.
You could probably make a case that Oblivion already has AI elements. It just wasn't advertised as the type of "AI" available now.