Your right, but you have to remember investing comes with inherent risks and while not all IEOs will provide results, I think the framework of an IEO is a step in the right direction.
How is it a step in the right direction? Is it more transparent than an ICO? How many can participate? I'm talking about IEOs on bigger exchanges here.
I'd say IEO are a step in the right direction when it comes to the credibility of the projects. (In theory) an exchange should have made an detailed background check on all the projects so that there won't be any scams on their launchpads because in the end that would also reflect negatively on the exchange itself.
But you also mentioned some negative aspects of IEOs: On the most hyped projects it's almost impossible to be fast enough to invest and a lot of users experienced technical difficulties.