I think the upset was less that Hugh was a beloved character (though I wouldn't discount that completely; I, Borg was quite a good episode) and more:
1) STP did something truly interesting with the character in bringing him back, showed how much potential Hugh and the xB storyline could have, and then just snuffed all that out before it really got off the ground. The loss of newly highlighted potential tends to sting more than just character death.
2) Del Arco absolutely fucking nailed the performance. So, naturally, folks wanted to see more of him doing this incarnation of Hugh, and it's not going to happen. Boo.
I do think Chabon is being a little dismissive. Yes, some folks are going to be upset when a character dies just because the character died, regardless of how much value that death has to the narrative. But sometimes folks re upset when a character dies because death is one of the least interesting things a writer can do.