So, if someone hosts an image editor as web app, are they liable if someone uses that editor to create CP?
I honestly don't follow it. People creating nudes of others and using the Internet to distribute it can be sued for defamation, sure. I don't think the people hosting the service should be liable themselves, just like people hosting Tor nodes shouldn't be liable by what users of the Tor Network do.
Always have been broken.
Hopefully, future legislation will cater less to publishers and copyright trolls. I'm not optimistic though. While certain kinds of publishers are indeed becoming less powerful, sports-related media conglomerates are successfully lobbying for more surveillance.
The general population will likely get the worst of both worlds, with copyright trolls getting to enforce unjust laws against regular people, while big tech gets to pay their way out.