I feel like the challenge for creators is less the "social media Orwellian dystopian hellscape etc" and more that virtually everything you can contribute has been done better by someone else before you.
Basically, recording and mass broadcast means moderate talents lose nearly everything (as far as social, or even monetary, value of their skills) and discourage people from developing those talents in the first place, because those technologies place them in competition with people who are at the top edge of human achievement in those areas—including dead ones. It's broadened how many people get to experience those top-tier talents, and how often, but practically obliterated a formerly-major component of how people related to one another, socially.
The Internet has changed this a bit. Some folks have responded to the problem by digging hard into a niche and taking their act online, because you can succeed in an really tiny niche while being only pretty-good at something, since there are so many people that a niche with nearly-zero audience can still reach a lot of people, considered over the entire globe—think filk, or steampunk-themed music, or doing furry art on commission, or something like that. But in person value among their actual social circle, and among family, remains low, because Spotify and TV and Netflix et c. exist.
Earlier today we had https://www.gwern.net/The-Melancholy-of-Subculture-Society , which I think ties into what you're saying here. And I think yours is a good observation. Day-to-day small scale entertainment has been reduced to zero or even negative value.
And yet, mediocre content abounds in the media. How should that be explained?
Even if it's mediocre, it can still be art IMHO.
Rather, I think it's just that Sturgeon's Law[0] applies to most things.
But one thought this thread is provoking is related to this well-intentioned but self-destructive (imho) 20th century cultural narrative that talent as a prerequisite for art creates a tyranny where certain people are allowed to express themselves with dignity while the vast majority are not.
Sometimes I like this narrative, sometimes I hate it. But regardless it undeniably had the effect of leveling the playing field while retaining the same old gilded-age toxic celebrity hierarchy, which simply seems to have had the effect of letting the wealthy and powerful silently dominate cultural / artistic production, which this thread already started to touch on a bit.
Ie, the now fairly ubiquitous experience of walking into an art museum, seeing a blank canvas propped on the floor next to a neon light. Thinking "Anyone could make that so whys this person rich and famous for it?" Shrugging, leaving and not going back to an art museum for another decade.
I enjoy that kind of art in the right context but it clearly has a destructive effect on peoples natural ability to care about art and have a healthy creative practice themselves.
How to take lessons from that exception and bring it to other lived experiences is uncertain. Most other niches don't have the fluffy animal aspect to smooth over the difficulty of getting friends/family interested in what you're doing.
[0] https://en.wikifur.com/wiki/List_of_conventions_by_attendanc...
There is so much fun to be had in the space between 0% and 100%, and some don't even get started until they're confident they're already at 95% in the comfort of their own home.