It's not perfect, but in terms of the readily available data, it's not terrible.
> As states open up and elective surgeries, car accidents etc increase the denominator will inevitably increase
OTOH, there's a credible argument that that is a kind of positive progress itself. And, no, it's not inevitable that the denominator will go up if COVID already has hospitals at capacity.
> What is wrong with the much simpler metric of “number of beds used by covid patients”?
That's a good measure for any state, but bad for comparing conditions among states. Share of available hospital beds occupied by COVID-19 patients might be better, but “available” is not always clear since physical capacity and staffing and other support may not yield the same maximum. Because of required staffing ratios, etc.