I hated it. It's completely superficial, I admit, but just as I'd rather watch attractive people in movies as opposed to unattractive ones, I'd rather listen to people sing who can actually sing well than those who can't.
I'm not sure the visual appeal is as much a big deal for me, but certainly listening to someone who can sing in a musical adaptation is pretty damned important. When someone's lack of singing talent takes away from the overall performance of the entire cast and reception of the movie, I don't understand how people can 'look' past that. For instance... Russell Crowe in Les Mis. Awful. Terrible. Made everything about Javert a joke, and I couldn't take the character seriously - which pissed me off because A) it's such a great musical, and B) Javert is such an important character.
Mama Mia suffers from a bit of the same, but since Mama Mia was more of a contrived musical as an ode to Abba, I was able to tolerate it some.
I had a bigger issue with the production and 'synchronization' of the audio of Watson's singing (and many others') in Beauty and the Beast - it was such a horribly bad job, especially in the opening scene. It was painfully obvious her voice was coming from a studio and auto-tuned.