they are paying miners out-of-band, with fiat, to fill blocks with jpegs, and ignore actual economic bitcoin transactions.

this is decidely harmful to anyone who wants to use bitcoin as an economic payments network.

if they were paying the miners with bitcoin, it's possible they would eventually run out of money, and the attack would stop, but they aren't. they're paying miners with fiat, which they can print, indefinitely, therefore they can sustain this attack as long as the fiat money printers continue to exist.

what is the difference between a State actor censoring the bitcoin network, by paying pools large amounts of fiat, to mine empty blocks.. vs a State actor paying pools large amounts of fiat, to fill blocks full of jpegs? ... the outcome is essentially the same.