Having had more time to collect my thoughts -

The issue with Zenos is that he doesn't fit the mold of what a lot of the fanbase has decided a XIV villain antagonist "should" be. Certain cross-sections of players have decided that villains antagonists in this game must be both sympathetic and tragic; Zenos fits the latter (no matter how much some people want to deny it) but not the former, so he has been deemed "badly written." (The point of Stormblood, that being "villains are products of their society," just seems to go completely unacknowledged as it pertains to Zenos.)

That said he did overstay his welcome a bit by surviving his own suicide to menace us another day, but... ehh, let's see where this goes.

As for ruining the power fantasy? Maybe a bit. The PC has won some pivotal battles that shake nations down to their foundations; they've chumped defeated at least two if not three Imperial legatuses. That Zenos could come practically out of nowhere and chump them is unprecedented within the story, especially after the high octane fights against the Knights of the Round and Nidhogg (Full Power). (Same deal for Ran'jit.) That implies Zenos could have chumped the same foes, and if that's the case there's no reason Garlemald should have been unable to conquer pretty much everything. (We know now it's at least partially because the Ascians were deliberately restraining it, but even so it rankles.)

I do have to agree that a lot of people tend to gloss over the fact Emet-Selch (and Elidibus) are responsible for the deaths of millions and complicit in the deaths of millions more, purely because they have sympathetic motives. I don't agree they lack any redeeming qualities, but holding them up on a pedestal is... not really appropriate as far as I'm concerned.