The factor that dominates our conversations about food - social class. We have a set of reflexive attitudes about food that are largely uncorrelated with health, nutrition or the environment, but are strongly correlated with the social class of who eats what.
Advanced meat recovery is the ultimate in nose-to-tail eating, allowing us to make use of almost every gram of edible meat on a carcass. If we're going to keep eating meat, we should celebrate advanced meat recovery in the same way that foodies celebrate unfashionable cuts or offal meat. We don't, because recovered meat is cheap and therefore has negative signalling value. The kind of people who buy grass-fed organic beef would never dream of knowingly eating "pink slime" or mechanically separated chicken, despite the obvious environmental and animal welfare case for eating perfectly good meat that would otherwise go to waste.
Lean finely textured beef is no less nutritious than any other kind of lean beef, because it is lean beef. There are possibly legitimate safety concerns about the use of ammonium hydroxide in the processing of lean finely textured beef, but it's widely used elsewhere in the US food industry and readily substituted by citric acid in this application. If you're concerned about health, then argue about ammonium hydroxide, not about modern techniques to get more meat from every carcass.
(Full disclosure: I am a vegetarian for environmental reasons)