A fundamental error
"Much of the content, such as CPU functionality and fetch-decode-execute cycles, is abstract and challenging for students, overshadowing practical exposure to emerging technologies like AI"
We already have a general population of "users" who rely on (presumably better informed) others to define and provide the technologies they make practical use of but understand little or nothing about. Unfortunately, it is from that population that successive echelons of the supposedly better informed are largely drawn, so the societal body of real expertise declines, and with it the quality and reliability of the technologies..
"It also pointed out that it is possible to pass the GCSE Computer Science course while doing very little – if any – programming on a computer"
Perpetuating the myth that programming is the primary computer expertise. But someone has to design the hardware, develop the new languages and protocols, ensure security and robustness, and a host of other essentials. A nation of coders who don't understand the systems they're coding on or for is at a huge disadvantage when it comes to developing systems with increasingly far reaching societal impact.
So I concur there should be two pathways, but it would be a huge mistake to deprecate computer science in favour of mere "digital literacy", even if that includes user level practice on "AI".
"The GCSE contained out-of-date content about networks and internet protocols that could be removed from the specification to make way for more exciting material, Adamson said"
I'm not at all sure that "exciting material" is the best criterion for what constitutes sufficient baseline knowledge for potential practitioners in a highly technical subject.
"a study [PDF] by King's College London, the Nuffield Foundation, and Reading University also recommended broadening the GCSE curriculum and better teacher training and professional development in the subject"
So the current comp sci syllabus is inadequate[1] and the teachers aren't sufficiently competent in the subject. Does this explain, at least to some extent, why the students are avoiding or dropping out of the subject? Maybe those deficiencies are the first things we should fix.
[1] I've taught on such courses and commonly found the (nationally ratified) syllabi patronisingly shallow and consequently boring to students. They generally needed deepening rather than broadening. We had to surreptitiously break the rules on order to impart useful knowledge and keep students' attention.