So, for a hobbyist, is it worth spending the 500 plus on an all-grain unit?
That depends on what you like out of the hobby and what you want to get out of it. If you play golf so that you can spend time with friends outside on a warm day, then better clubs will not improve that. If you enjoy the challenge of improving your score, then some better clubs might help with that.
All-grain brewing opens up another aspect of brewing. I enjoy brewing all-grain more than brewing with extract. All-grain brewing opens up a wider range of ingredients and gives you more control over the final product. I would argue that all-grain brewing opens up potential for brewing better beer than with extract (though you can make some very good beers using extract, especially when adding in partial mashing).
I see lots of advice saying "just buy a bag and do BIAB". That would depend on what size batch you want to make and what equipment you have. If you want to make 5 gallon batches of beer and you already own a 10+ gallon kettle, a high power heating source (propane, electric, natural gas, etc.), and a chiller, then yes, just buy a bag and try out BIAB. If you don't already own that gear, then purchasing an electric all-in-one setup might be a fairly cost effective and easy way to get into all-grain brewing.
I would note that I am a huge fan of stove top 2.5 gallon BIAB brewing. I brew a lot of batches using a 5-gallon kettle and 3-gallon Fermonster fermenter. I so use an immersion chiller, but an ice bath or no-chill are options. I do also have some small kegs, but bottling is also a fine option. There is a good chance that you could use your existing system with a bag to brew smaller sized all-grain batches.