The reasons include the fact that training data is often included without proper licence to use the work, which is plagiarism. I'm fine with little guys stealing from big corporations, but in this case, it's big corporations profiting off this, and little guys are the ones who don't have the resources to defend themselves.
That's not what plagiarism means. At the very worst it could be a copyright violation, but they're not really distributing someone else's work without permission. Licensing issue? Possibly
You're confusing plagiarism for copyright infringement. Copyright infringement is what you're describing. Technically, some of the most textbook severe cases of academic plagiarism don't infringe copyright. Plagiarism is taking someone's ideas without proper credit. In academic spaces, plagiarism is not usually a legal dispute, but instead a matter of integrity.
These AI plagiarise by nature, because they are incapable of saying which of the data in their training database was used in the creation of each of their works.
Plagiarism is taking someone's ideas without proper credit
Plagiarism is not merely the act of being inspired by another source. It's passing off someone else's work directly as your own. Derivative work is not plagarism, you don't even have to credit for that so long as it's transformative enough, which is where it intersects with copyright law. If I see a cool piece of art and am inspired to draw something in the same style, that's not plagiarism by itself unless it is essentially a draw-over or directly copy-pasting their work.
A passage or thought thus stolen.
The act of plagiarizing: the copying of another person's ideas, text, or other creative work, and presenting it as one's own, especially without permission.
Taking someone's words or ideas as if they were your own.
American Heritage Dictionary 5th edition
to steal and pass off (the ideas or words of another) as one's own
Merriam Webster
the process or practice of using another person's ideas or work and pretending that it is your own
Cambridge Dictionary
You're free to not like AI art, but it's not plagiarism to train the models. It's not plagiarism to use the models to generate new art. I'm not plagiarizing the thousands of pieces of art I've personally seen if I draw something new by myself. If an artist paints something new, do they need to source every single piece of art they've seen in their lives? They've been influenced by them all and they all collectively contribute to the ideas that artist comes up with, so why not? Where's the line?
Now, if you're going out and claiming the art as your own then I personally believe that could absolutely be considered a form of plagiarism since technically it was the model doing all the work, but it's certainly not plagiarizing the millions of pieces of art it was trained on. Those art pieces are not copied or directly reused in the model's memory, it uses the general structure and form of the artwork to create new works.
Copyright infringement is also iffy since it is very likely to be considered transformative and therefore permissable under fair use.
Again, you're free to not like how the models are trained, but calling it plagiarism is just flat wrong.
The outrage is about an artist at WotC using an AI model trained on fully licensed images, so the plagiarism argument doesn't hold any water in this case.