I can sympathize with both points of view to an extent because I disliked Vic at first but have grown to appreciate the character over time, largely for the in-universe musical element he brings to the show.
A musical score is one thing, and of course standard for the genre, but music being produced by the characters in the world is a dimension that is often lacking from these types of shows. It's complicated, of course, since inventing a musical style that would be appropriate is not easy. Vic is basically a way of bypassing that problem.
I don't especially care for the musical style Ira Behr chose, but I love the concept, and it adds to the deliberate breaking down of suspension of disbelief that is a big part of the later seasons of DS9. It's fun that Visitor and Brooks get to drop character and sing. I also like that the DS9 crew's final gathering is basically an out-of-character cast and crew party in a lounge. LoL!
In a sense I would compare Vic's lounge to the final scene of
Far Beyond the Stars: which is the fiction, which is reality? For the characters on DS9, Vic's lounge is the fiction, a holosuite fantasy on their very real space station. For us of course, Vic's is closer to reality, and the space station is the fantasy. A story within a story within a story.
DS9 got a lot of things right and, oddly enough, I think the holodeck is one of them, with Vic being a prime example. He's "real" in the sense that he has an impact on the other characters, who of course are only "real" in quotation marks as well. Vic is just a hologram, but then the whole thing is fiction anyway, so the same can be said of everyone else on the station. The holodeck works well as a way of thinking about fiction, and how it relates to reality (or fantasy to reality, as in TNG's
Hollow Pursuits, or DS9's lighter
Our Man Bashir).
Fictional characters
are real in the way Vic is real, but of course they are not real in the standard sense. This is more interesting than discussions of "holographic rights" or whatever. "He's real to me," as somebody says in
Badda-Bing, Badda-Bang (or words to that effect), so these fictional characters get together to basically save Vic's show from cancelation. Again, LoL!
It's too bad DS9 doesn't end with a final shot of Benny Russell at his typewriter, as the writers at one point had envisioned. For me that final shot is essentially there anyway. In here, in my mind
