Did AI beating humans at chess:

a) destroy chess and make it a pointless endeavour,

or

b) make humans much better at chess.

Chess has always been a game. For other intellectual activities, at least for several people, a big part of the pleasure in engaging in such activities is the sense of contributing something that matters to a collective effort. Strip that away (e.g., because a machine can do the same thing more efficiently) and you effectively make such activities pointless for those people.

Just as AI chess performance failed to render human chess playing pointless, it's unlikely that AI will make human thought pointless. Unfortunately, not being pointless doesn't create economic leverage or incentive, and currently a significant portion of humans depend on being the best chess solvers to sustain themselves. If Deep Blue rendered large portions of human thought economically meaningless, we might look at it a little differently.

It didn't destroy chess but it did make it a little irritating in some ways. More mechanical. Some chess players have bemoaned the level to which grandmasters and other highly-ranked players just endlessly study opening-book theory and I think computers made that worse. Bobby Fischer also agreed and that's why he invented Fischer random chess.

I do think it also took some of the magic away from chess, and Lee Sedol has said something similar about go.

So did it destroy it? No. And maybe you could make the argument that it got more exciting in some ways, but I think it sort of degenerated into a spectacle and it's just not as interesting as it used to be, and I think computers have played a role in that.