Is it possible to create a fantasy world that is totally sui generis - borne out of one's imagination and nothing else?
Of course not. We are all products of our biology, history, language, culture, and time, and we perceive and imagine only through those lenses. A feat of pure fantasy in the sense of bearing no relation to the real world is therefore itself a fantastical notion. Fantasy is always ineluctably rooted in reality.
An individual's imagination in other words is best thought of as a kind of confluence of many currents coming together to form little eddies and whirlpools, none of them ever the same but all of them born from the same mixture flowing in from the various tributaries. Think of Tolkien's Middle Earth as the paradigm case - a great imaginative feat, of that there is no doubt, but plainly and unabashedly springing from the author's cultural background, knowledge of history, birthplace, language, and all the rest. And there is no creation in the field of fantasy and science fiction about which similar things could not be said - the only real difference being that very few authors or game designers embed their creations in the real world as consciously as Tolkien did.
What we downplay in this, and what truly separates us from our Robot Overlords, is the role of experience. There is no question that the World Wars - both of them - were significantly present in the mixture of influences that created Middle Earth (certainly in its later iterations), for example, and no question either that other important features of his life (such as his Christianity and his very loving relationship with his wife) were also in the water. This will be, to a greater or lesser extent, true of everybody, even at the level of what books one has read, what films one has seen, and where one has been on holiday. It all goes in; it all contributes; and we personally often have little to no insight into how.
The individual human being is therefore a unique blend of all of those features that I earlier identified - biology, history, language, culture, time, and so on - combined with all of the things that have ever happened to them, every second, since the moment they were conceived. This makes their imaginative ventures inescapably an expression of themselves.
AI cannot hope to replicate this, since all it is capable of is drawing together existing creations, mixing them together, and spitting out pastiche. And we should therefore play to our own strengths. Pastiche is treated as an inferior act of creation partly because it apes too much the work of another, and we sense that there is something illegitimate in this: the original work has so much of the author in it, and to copy is therefore to expropriate the product of his or her unique experience and character. What we need, in fact, is a properly worked out critique of pastiche, and a philosophy of creativity that emphasises above all pastiche's negation. We need, in other words, to embrace the fact that fantasy is a product of reality and an expression of ourselves, and worth taking seriously as a consequence.