Doesn't seem really at all repugnant to me.
I think there are two brain bugs that make this seem repugnant:
- "Barely worth living" sounds bad. I think it makes it sound like a negative experience. In fact we're meant to be considering a small positive experience.
- Our brains can't cope with large numbers. Like, we can't really cope with numbers like 500. There's no way we can adequately cope with the number of people that we're considering in this thought experiment.
(I don't think these points are original.)