Is udp/chargen really a useful publically exposed protocol? Does it provide a benefit over tcp/chargen?

Most of the fine people running chargen servers seem to be running the server from Microsoft services for UNIX package which is configured to send giant fragmented responses, and then they have a firewall that drops the first fragment. Thanks a lot guys.

Those organizations are unfortunately confused and are not directing their frustrations towards the real cause (ISPs which allow spoofing).

... do people still use chargen? Are there seriously still chargen servers in the world?

Oh man they are rare but they are definitely still out there. Think printers from the 90's that came with chargen & usually telnet enabled by default, and for some reason are publicly accessible.