I rewatched Badda Bing, Badda Bang, and although I am still not entirely sold on Vic, I can make peace with the character's purpose. Functionally, I still think it was a poor replacement for the nightclub that the station needed. However, Vic's is about as close to watching TV that would ever occur in the 24th century (except Tom Paris literally watching old TV shows). TNG went to such an extreme to make holographic programs seem less like entertainment: they were interactive; they involved the creative input of the players; they referenced literature and historical events; and they involved real physical activity. The holodeck seemed like an extension of the "bettering oneself" paradigm that supposedly informed work. Vic's had its interactive elements, but the program was more clearly downtime: a relaxation, a diversion. People dressed up, but they always came as themselves. The attachment the characters had for Vic seems more like how the audience feels about TV characters.
So, I can live with Vic. I could have done with something else, but his character was not the worst filler.