It is true that you naturally become more reliant on the automation, especially since it almost never fails.

But I suspect the net effect on aviation safety is positive...

In order to have a safety problem with the automation both the automation and the pilot must fail. While the regular use of automation makes the pilot failure more likely, this is more than offset by the reliability of solid-state electronics.

With just the pilot, human error is going to be a regular event...that's just the way it is.

Automation still hasn't made any inroads into judgement and dealing with unexpected situations.. The Global Hawk is the most commonly used fully-automated UAV...the only way they can get it from Point A to Point B is to clear all other aircraft out of it's way. When performing it's mission at it's destination it just flies in circles at altitudes above all commercial traffic...real challenging.