Well it was never going to be FTTH ~everywhere~. The original plan proposed by the Labor government was for every town with more than 1000 people to have FTTH, with the remainder being served with either fixed wireless, or for the most remote 1% or so, satellite (which is already available of course, but the plan included a significant upgrade of satellite speeds and capacity). Doing the calculations, it essentially meant 93% of the population would get FTTH.
The Liberal government from the outset said that if they got elected, they'd scale back the FTTH and rely mostly on FTTN/VDSL for existing developed areas (though, still supporting FTTH for new greenfields development, since if you have to lay cable anyway it may as well be fibre). As you say, that's probably fast enough for most purposes provided you can keep copper line lengths down to a few hundred metres at most.
The criticisms of this revised plan, broadly speaking, are that:
1. Much of the existing copper is in bad condition and would need to be replaced anyway anyway to deliver decent VDSL speeds and reliability. Telstra, responsible for managing the copper network, has publicly stated that they consider the copper network at end of life.
2. The Liberals' plan, compared to the original Labor plan, would only result in cost savings of 20-30%, yet deliver an outcome that is a lot more than 20-30% worse (in terms of speeds, reliability and future capacity for growth and upgrades).