I see no reason why the image model couldn't work in a space of shapes and textures which are then mapped to pixels after the fact. Or even just leave its outpu

I see no reason why the image model couldn't work in a space of shapes and textures which are then mapped to pixels after the fact. Or even just leave its output in a raw vector based format. You could pick a different basis to work in. Though I agree there is something ontological missing. All of these are flat basis. There's nothing spanning the recursive dimension. It can't draw a picture within a picture within a picture...to some specified depth n because it does not work with abstractions of "objects". The joke of Rene Margrit's "treachery of images" is lost on the AI.