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I’d say IF you’re only playing “strummy” songs that you can just march right through and sing…without having to practice them…then, yes you might be hurting your guitar artistry by just memorizing new lyrics and chord progressions.
But why not find a song you want to learn that has a “harder” guitar part. Or has a very recognizable finger-picked part… maybe James Taylor. Learn to do it the artists way.
Or maybe a song like: “Wild World” by Cat Stevens which is strummed but has some nice single string runs in it. Or most any of the old Cat Stevens songs that have challenging strum things going on. Peace Train,
OR
Work out your own arrangements of simpler songs…experiment with “chord substitutions” such as the chord in the key that’s two steps up or two steps down from the “correct” chord. Often you can still sing the melody against these chords ( especially when you add the 7ths). Because a Em7 chord (E G B D) has a G chord embedded in it. (G B D) So typically what you can sing against a G, you can sing against an Em….(usually). You don’t want to change every chord, but enough to cause interest.
KEY OF G Chords that fall naturally within the key signature.
G Am Bm C D Em F#dim G Am Bm C D Em F#dim G
Gmaj7 Am7 Bm7 Cmaj7 D7 Em7 F#dim Gmaj7 etc.
OR
If that doesn’t float your boat, Find ways to make simple songs more interesting. Learn the song, but learn a lead for a verse or for a chorus, or both. Get a looper or a DAW to record your rhythm tracks to play your lead along with to.
There are so many ways to make a simple song more challenging. Make it a challenge for your musicianship improvement…(and it will be more interesting) on the guitar. Don’t settle for three chord “Old Susanna” when you could do this:
https://www.youtube.com/watch?v=FVaStQP1wWc
I learned this arrangement when I was working on Barre chords.
First line: Amaj7 Bm7 C#m7 F#m7 Amaj7 F#m7 Bm7 Bm7/E
OK
that’s too much of an answer to a simple question…but the idea is this, make it interesting to you…and make it a challenge to you. Even if the song is a simple one. If you can play it great in G or in C, put a capo on and play it in the keys of D or E.
Whatever it takes to challenge you at the moment is worth doing “for practice” and you may find you like the new things you come up with, and they’ll have a new flavor, and pretty soon you have your own “style” going on.
Then people will be talking about the artistic way you play…when you were just trying to challenge yourself to get better.
Dave