The fact that Luke managed to save literally the entire Resistance without fighting is incredibly in keeping with the established character for him. Ultimately, not giving in to anger and rushing to conflict is what allowed him to turn his father back to the light and defeat the Sith at the end of ROTJ.
Saying he should have turned up with his saber to face down Kylo is missing the point.
The way it was done was a very good fit for three reasons
1. It was an arc of redemption for Luke. Rushing head on to conflict is how he contributed to the rise of Kylo. It's been an ongoing character flaw for Luke for the whole of the saga that he's been in. Not rushing head on to conflict here allowed him to save the Resistance.
2. It ties back to the end of Return of the Jedi for the above reasons.
3. It added a very spiritual nature to his end. We see very directly that he's opened himself up to the Force again in precisely the way Yoda had described it to him 30 years before.
“You will know when you are calm, at peace. Passive. A Jedi uses the Force for knowledge and defense, never for attack.”
As an aside, I found that TLJ riffed much heavier off ROTJ than ESB.
There are people who are fine with Luke's arc, and I am happy they like it. My personal major issues are two fold: Luke and Rey needed to eventually bond for narrative reasons (my belief). And it never happened. In fact, my feeling is that Luke was a borderline jerk to Rey - an orphan who is looking for help and belonging. If you have read about the cut scenes, it could have been worse. There is a decent story in there and I believe it could have been salvaged with a few changes, which leads to my second problem: No longing for Episode IX. This episode failed in one of the most important goals of a middle chapter: leave us longing for answers and wanting to see the adventure continue. I (among many people I personally know both casual and hard core fans) have the least desire for a next chapter EVER in the saga. Given the next chapter is theoretically supposed to bring a climax to the Skywalker sage, this is inexcusable.
This could have been salvaged quite easily, from a screenwriting perspective.
Have the Battle of Crait interwoven with the Ren/Rey/Kylo Dynamic. All things could have narratively played out the same, with the following exceptions:
End the movie with the following four scenes:
1) After Luke has appeared to save the Resistance, Leia moves the rocks, gives a passioned speech to continue the fight, and passes the fight on to those in their midst and disappears. The rest leave on the Falcon.
2) Kylo and Rey have defeated the Praetorian guard and Kylo wants Rey to join him to begin a new movement, not Jedi, Sith, Resistance, or First Order that will bring balance and peace offers his hand.
3) Final scene is Luke raising his X Wing out of the water and final shot is Luke flying off the island out of exile. Iris Out. Credits
OK, now I want to see Episode 9! Instead we are left with ashes of a story that could have been. All of course in my opinion of things. For those who like where the story is going, I am happy for you. I just am not.