If you’re in high school/college (hell your 20’s) and can game 10+ hours a week it was an unbelievable deal. Even $30 isn’t that crazy if you’re really using it. But a lot of people can’t get that kind of value out of it and it doesn’t help that Microsoft keeps cancelling every interesting game and/or lets their best studios languish.
I think it's still a good deal even for more casual gamers - I imagine it would feel worse to spend $80 on a game that you may put an hour or two into, if you ever launch it at all. I imagine most casual gamers will simply not buy many games; whereas on Game Pass you can browse, pick up a game (that would otherwise cost you an arm and a leg) for the few hours you've got for gaming.
But like another commenter points out, if you're playing games like Silk Song or other similarly-priced games, it makes more sense to buy the game.
But yeah, you're absolutely right: lots of flaws with it, and I expect it will just get worse, much like Netflix.
Gamepass has a lot more than AAA’s (Silk Song for instance) and if you haven’t been sticking with consoles in particular over the last 10-15 years the back catalog of tentpole titles is actually pretty impressive.
I’ve had many conversations with people in their 30s who have not touched video games since the 360/PS3 era. Gamepass, even if just for a few months, makes a ton of sense for them if they have the time.
I say this as somebody who absolutely does not think people should be paying $30 for gamepass generally speaking and I think Microsoft/Xbox is incredibly weak right now. But there are certainly cases where it makes a ton of sense and Sony isn’t exactly offering a better alternative unless you want a Final Fantasy machine that’s library is dominated by PS3/PS4 remasters (which in many ways mimics the value prop of gamepass for those who have not been gaming for years).