There are two ways to look at this story and, indeed, the whole series. One is that it's a humorous, short, easy-to-read book that appeals to reluctant readers, and there's no doubt that all of that is true. It's the illustrations that make it particularly funny -- simple b&w cartoons that are so brilliantly done that they convey both the characters as well as Greg the narrator's attitude towards them, and yet somehow still remain believable as a kid's drawings. Along with that comes text that always ensures that the reader knows more than Greg and can have the uh-oh pleasure of anticipating what is going to go wrong.
The other way to look at it is that the story is basically
The Three Stooges without the nasty violence, or perhaps an extended version of
America's Funniest Home Videos. Every single character, major or minor, adult or child (including, especially, the narrator, Greg), is pretty clueless, often devious and mean as well, and much of the humor derives from watching them get humiliated. There's no real plot, no character growth, no lessons, just the dubious pleasure of feeling superior to these characters. So if your kids like it, fine; it probably does no harm. But as to the argument that we need books like this to entice reluctant readers to read, one can hope that J. K. Rowling has forever dispelled that notion.