I did appreciate the capitalist bent on Omelas here. (How many Omelas stories have I read in the past year? It seems like a lot.) However, it's not just that that the city is powered by extracting fathomfolk magic, it's that fathomfolk are in such dire straits that they airquotes choose to go have their magic extracted because it's the best option they have available to them for survival.
I will also say that this is an interesting book to set against Babel, both in terms of what perspectives it centers and who it blames. One reason for this is that it feels like it focuses on Drawbacks more directly. We see Ministers and the Council, but largely at social events from the perspective of Cordelia, rather than making decisions directly. The plans of the Drawbacks are foregrounded but the Council just feels like a fixture that exists in the background where we see little of their decisions directly. To me, this makes the book feel like its loudest critique is of direct violence, and it takes a harsher view of the Drawbacks' retributional hatred than it does the more structural (economic, environmental) violence of humanity. I think that's true even if you ignore Lynnette's genocidal actions at the end.
Minorly, and perhaps this is just me, but I found that I could easily suspend my disbelief that this world is populated by fantasy sea creatures that can also interbreed with humans; however, something about drinking out of glasses inside an underwater bar was too much for me to handle. Most of the story takes place out of water, and so this sort of thing didn't happen too often, but it still caught me off guard. I might be judging too early--maybe this detail will pay off with some future revelation that fathomfolk were once human and that's why they don't have an alien sea culture that's distinct from humanity.
My final thought is that I'm not sure what to think about the ending. As a fantasy twist to transform humanity to save them, I think it's cool. As a way to end discrimination and hatred, I'm much more suspect especially in a realm that talks so strongly about fathomfolk hierarchy. I hope the next book will get into this a lot more, as surely there will be a lot of fallout from these changes.