I agree with this. People who think this should make sure to say so in any survey that comes out next week.
I also think that the type of quests available on the starter islands are different than what you get in the cities. The starter islands provide gear and other benefits that I think are more than worth it. I gave them my thoughts using the in-game /feedback command.
I believe that ESO needed to make a strong showing this weekend in the popular opinion arena, and that may not be happening due to bugged quests and strange things happening with the launcher. This beta was as much a PR event as it was a test of how they applied what they learned from the last beta.
Just based on what I am seeing reported, if I were in the shoes of ESO project management, I would be very concerned. If they decide not to sweep this under the rug and fix it all after release, I would not be surprised at some sort of marathon development work this week followed by a surprise ("bonus") beta next weekend.