I don’t think it’s an embarrassment. Indeed, it surely raises the price that an owner would pay for a new franchise.
For the Vegas draft, teams could protect only one goalie and either (8 skaters) or (7 forwards and 3 defensemen).
The previous few expansion drafts have allowed protecting 1-2 goalies and 10-14 skaters.
From what I’ve read, Seattle will get essentially the same deal Vegas did (unless of course they get a relocated franchise instead of an expansion team).
It's also worth noting that conducting an expansion draft in the salary cap era gives another huge advantage to the drafting team: The other teams are willing to trade the new team draft picks in exchange for agreeing to take a specific player. This is exactly what happened with Marc-Andre Fleury. Las Vegas didn't just pick him because he was available. Pittsburgh gave LV a second round pick in the 2020 draft to take him off Pittsburgh's hands!