Would it make American English better or worse ?
As a native English speaker, I can assure everybody that it could not make it any worse than it already is.
Sometimes, American English actually hurts the heads of original native English speakers (people from Britain), due mostly to the American incoherent and random misuse of various words. eg. Americans hear a peer or TV personality etc. use a random word incorrectly several times (awesome, literally, unique, liberal, spicy, gourmet etc.) so they now feel compelled to randomly jam it into every sentence they use. To an actual native speaker (or skilled teacher), Americans appear to be only semi illiterate.

We would have been ridiculed for using words without knowing the definition or proper usage even by the age of around 10. It was considered to be uneducated at best, or you were just the dumb kid to bully at worst. Whereas, in America it is encouraged (the dumb down effect).
There are around one million words existing in the English language. Why destroy that massive collection of fine tuned communication descriptives by needlessly changing existing well established definitions often to their antonym ?

Odd that people prefer to sabotage a language rather than learn to use it. I feel sorry for skilled English teachers in America. I had many a good laugh with some of them as we debated the topic, “that literally tactically liberal unique gourmet spicy (plain mild cheese flavor) popcorn from MacD’s was literally awesome.”.
Hmmmm… Could do better -G.
(I feel your pain English teachers across America)

Would a competent AI butcher a language like an American ?
No, while humans only know a few thousand words, AI knows a much larger list of words. Very few people could memorize just one small dictionary.

Could AI write a better story ?
AI should be able to look up all one million’ish word definitions and proper usage, so in theory yes. It would fail if it were illiterate.

However, due to the existing limitation in story archetypes (the villain, hero, protagonist, comedy, horror, mystery etc. formats), it therefore has the same limitations in that sense.
All the characters and stories have already been created long ago. eg. Just look at the iterations since the Sherlock Holmes style detective genre was formulated, that lead up to many new detective characters but they were all the same, even the recent TV show ‘House’ was based on the Sherlock formula with a twist. Even Sherlock stories were inspired by existing short stories of fictional detective crime stories of mr Doyle’s era.
Hard to be original when it’s been done already.

AI has great potential but, you know it will only be abused just like any other power existing in today’s society. Humans prefer to destroy rather than create or improve for real progress. Some would prefer to keep their crooked games in play at any cost to the rest of us.