Found this very good description on Wikipedia:
So the question should not be why they are bad for elite. The question is: Why do people deem them to be useful at all?
"claim to provide a certificate of authenticity"
and as basically
every amateur photographer and artist found within
days of NFTs becoming a big thing, it's entirely possible to create an NFT of something you don't own. It got the point where sites like deviantart have a
bot that checks the big NFT galleries and alerts artists when someone has minted copies of their art.
So... since it's possible to create a token of something you don't own, if follows that the token does not, and
cannot constitute any form of proof of ownership.
As for tracking which accounts own what assets in elite dangerous, technology already exists for that and it's called a "database" and fdev already have one.
The real thing to put this thread to bed is that FDev sell their games on steam and Almighty Gaben has decreed that NFTs and play-to-earn mechanics are verboten on the platform. If you want to play with that nonsense, you don't get to do it through Valve's marketplace.