It's been a while since I had gone through the series so forgive me if I'm wrong on certain parts here, but I always found Shion to be interesting as a protagonist and I feel like most people disliking her and what she does in 3 to be a result of the poor pacing brought about from the series having to half its length because of how shit Xenosaga 2 did. There wasn't really a whole lot of time to let things breathe and they kind of justify it with the time skip in 3 but I would've loved more time to let things simmer. This also won't be my full thoughts as there's a lot to say about Shion and my memories are muddling things a bit. I definitely don't think Shion is for everyone, but god I couldn't imagine Xenosaga without her, or with her taking a backseat to KOS-MOS.
I don't hate the standard JRPG protagonist at all, but I feel like Xenosaga (as well as Xenogears) wouldn't benefit from having one at ALL. In matter of fact, it'd probably make those games' stories worse in some way. Shion was somebody who really didn't take shit from anybody, she'd actively threaten the lives of people around her to get her way which is probably the most she could do considering she's practically just an engineer stuck in a cosmic situation with her ex-boyfriend's murder robot.
Xenosaga 3 Shion is somebody who is at the end of their mental rope and the parts where the game explore her backstory are probably the best parts of the trilogy next to some parts in Saga 1. I think she can be a whiny bitch at times, but considering all she's gone through, it's partially justified. I don't think a character is bad or terrible because they're whiny, it's just if they're only exclusively whiny when it becomes a problem. I don't expect a 20 something year old mentally-ill scientist to handle any of this shit well or normally or in any stoic fashion. She does absolutely develop and change between Saga 1 and Saga 3 though.
What most people hate Shion for was probably when she heel-turned in Xenosaga 3 for her ex-boyfriend for a total of like 30 seconds. I don't particularly love this decision either and it's probably the dumbest that she ever gets. I will say that she went through a considerably high about of shit in this game and she wasn't ever the most mentally stable even back in Xenosaga 1. If Shion had more time with Kevin before the heelturn I could see it but as it is now, it doesn't really work for me.
I don't hate Shulk at all, but having him fall more in line with other JRPG protagonists instead of being something like Fei and Shion kind of hurt a bit when I was playing Xenoblade. I always liked the fact that the Xeno series up until this point had complex protagonists who didn't always do the right thing all of the time.