Fair question. People have kept pictures, paintings, art, belongings, etc of their family members for countless generations. AI will surely be used to create new ways to remember loved ones. I think that is a big difference than "keeping around grandma as an AI version of herself", and pretending they are still alive, which I agree feels unhealthy.
Made me think how different can be generations and what is countless. I can count back 2 and have not even seen anything about my grandfather who was born 101 years before me (1875). At least I have “signature” as XXX in 1860ies on a plan of farmland from his father, when he bought it out from slavery. And that actual farmland.
Good luck AIng that heritage.