Currently the Idealistic Foundation civic gives a +5 bonus to happiness. However, given that happiness no longer affects productivity directly, this bonus is extremely underwhelming. For comparison, consider the civics Shared Burdens and Police State. Both of these civics give +5 stability as well as an additional positive effect. As far as I can tell, in 2.2 +5 to stability is better than +5 to happiness. So why would anyone take Idealistic Foundations except for roleplay purposes?
Because they don't have the option of picking Police State and want a production bonus from all pops.
Edit: removed weak argument.
Idealistic Foundation requires egalitarian or fanatic egalitarian.
Police State requires NOT being fanatic egalitarian.
As such, the only ethics combination where the two compete is for societies that are egalitarian. For all other ethics only one of the two is available, meaning that they do not compete for the player's choice of civics.
It follows that Idealistic Foundation has a role, despite Police State being strictly better in the one case where they do compete.
So while I agree with you that Idealistic Foundation is currently a weak civic to pick as +5 happiness isn't that much and it might be a more interesting pick were it stronger, the bonuses from Police State are irrelevant as to whether Idealistic Foundation should change as they don't compete in the general case.