I don't follow the criticism. It is built on very weak foundations.
Open source is just that - open source. Whether it is useful to you
or anyone at all is another matter.
"Copilot chat" isn't open source. It's the service.
In the end, the fact that it exists makes a difference. It won't be useful to all especially non-technical people who've never seen the nuts and bolts of a vscode extension.