Kinda useless then. The flaw of PoW (and PoS for that matter) is the flaw of capitalism: loads of money makes more money. But it has one unique quality: securing a decentralized blockchain.
This leaves the good part out and you're only left with a competitive game, in which the small fries can only squirm.
Can someone counter this argument? I don't see a need for artificial coin distribution, but maybe there is.
That really depends if you consider POS secure. If you do, then PoW is completely useless by your logic.
I would say though, that for Bitcoin the opposite was true. PoW was created specifically for distribution. Else Satoshi would have had all the coins, and needed to sell them (which would rely on trust/banking).
You could argue that that is also less the case by now: New POS currencies can use Bitcoin for distribution.
Not sure, but I think there is even a quote by Satoshi - where he calls Bitcoin the bootstrapping currency.