The use of the word fraud was not mine, however I suspect it relates to how the jpegs are being stored in blocks.

The OP_RETURN op code was created to give users of Bitcoin a way to store arbitrary data as part of transactions. Many did not want arbitrary data in the blockchain at all, but this was done as a compromise, to appease an additional subset of users.

This is not how the current attack is being executed. Rather, those behind the activity are exploiting a bug in the Taproot upgrade, through which an an arbitrary amount of data can be shoe-horned into transactions, after the OP_FALSE op code.

The means by which they are able to do this was never planned, and had it been clear at the time, there likely would have been steps taken to ensure the current behaviour was not possible.

Rather than 'leaving it to the free market', to 'solve', the better solution would simply be to fix the bug. The same way we fixed the inflationary bug, that allowed an attacker to create infinite Bitcoins, out of thin air.