If you cannot distinguish reality (well), and in fact it becomes possible that most things you see do not exist, then there is nothing to stop a bad actor from producing a fake version of events in which they are elected, control everything, etc.
So, democracy would cease to exist, because democracy relies ultimately on a choice - if you have no choice then you do not have democracy, only a dictatorship.
If I see a photo in the Guardian newspaper (or any other reputable news outfit) I'm going to presume it's real, and I expect journalists to verify that for me. If I see a random photo that doesn't look quite right on a 4chan, I'm not going to immediately assume it's news.
Scale, cost, and reach.
I think it could be claimed that we're clearly in the process of learning to distrust. People distrust media more now than ever [1], because they've demonstrated, again and again, that they can't be trusted. Trust in institutions are down to new lows [2], because they've also shown that they're untrustworthy and/or incompetent. Everyone is shouting "disinformation", "misinformation", and "fake news" constantly, because nobody trusts anything anymore, and rightfully so in many cases.
1. https://news.gallup.com/poll/355526/americans-trust-media-di...
2. https://news.gallup.com/poll/394283/confidence-institutions-...
People already have trouble telling propaganda from fact. That has been going on since forever.
At the end of the day I don't see this being a game changer. If anything, now video and photos are less evidence for/against something as the potential falseness becomes well known. Congressman X: "no, that wasn't me you saw leaving the hotel with the prostitute, my slimy opponent obviously is deep faking stuff".
And people will continue to believe what they want to believe, in spite of all evidence to the contrary, just like they do right now.
An environment in which 90% of the information is adversarial is really bad. It's a severe problem and very challenging to navigate. An environment where 99.9999% of it's adversarial and it's even harder than before to sort truth from fiction, functionally no longer has any flow of real information whatsoever.
Maybe liberal democracy is not the final outcome of human civilization. You like it and I like it (presumably we were both raised to believe this way) but perhaps it's not really true.
Just to question a base assumption here.
It seems to me, if all the things that are claimed to threaten liberal democracy actually do, liberal democracy might be much less robust and long lived then previously believed.
[EDIT] One thing I no longer think has any realistic future is the open, semi-anonymous Internet. We're either losing it because despots take over and definitely won't permit that threat to remain unfettered, or we're losing it (in perhaps a gentler-touch way) because we have to to prevent authoritarian take-over and vast civil strife. I don't think we're getting to keep that no matter what happens.
Even the "good guys" will call emergency that will never end.
Oh well, it was nice while it lasted. An intellectual Cambrian explosion. And all that porn!
On that note: I can't wait for the resulting proliferation of photorealistic tentacle hentai. Imagine the possibilities!
Otherwise, I fully agree with your point.
Then everyone quickly realizes it's all garbage. The bigger danger is when people think garbage isn't possible, which has been the case since Stalin erased people from photos 98 years ago.