They’re probably losing money now and just trying to build a user base as a first-mover. They accept donations and subscriptions with fairly minor benefits, but I imagine hosting and serving sizable AI models is not cheap.
They’ll probably have to transition to paid access at some point, but I don’t see it as particularly unethical as they have bills to pay and do attempt to moderate content on the site.
I tend to agree generating adult content of real people is unethical, but probably less so than how a lot of real porn is made. I don’t think there should be open avenues for sharing that kind of stuff online, and their rules should be better enforced.