Pegg is terrible but the character has gone through severe character degradation since TOS anyway. The movies made him increasingly incompetent (Remember Star Trek V?) and in the TNG episode Relics he's just a weird goofy slob.
Simon Pegg is a good actor, the problem is that Scotty just isn't written right. He's too comedic, even Pegg has said he wants the character to be more serious than he was in XI.
Aside from Trek V, I didn't think the other movies did a bad job with him. Relics has some good character moments, though seeing him act the bumbling old man thinking he's helpful when he's actually getting in the way was a diservice to the character.
The 'continuity' was always the worst thing about Trek. Once the franchise stopped being about people and became this hide-bound keeper of Trek history, it was finished.
That's just BS. Most fans cared about good characters in good stories. For me continuity was a sign of quality. That the people making Trek actually cared about what they were doing. When people complain about "continuity" the mistake is so blatant a mistake even non-fans notice.
Let's talk about continuity. If it wasn't such a big deal why does JJTrek create an entirely new alternate universe. For some strange reason, this bold filmmaker is afraid of a bunch of online fans.
Continuity is gravy to the storytelling meal. Yeah, it's great when it's there, but a great story will stand on its own quality, even if there's no continuity.