I read a long time ago The Way of All Flesh which is a novel that I adore. I never followed up with Erewhon until now. Erewhon starts as an adventure novel, but soon turns into a satirical essay. The narrator, Higgs, soon concentrates on the Erewhonian belief system, which he finds ridiculous, but often ridiculous for reasons which are also ridiculous, characterization and plot go out the window and are replaced with recounting fallacious arguments for absurd belief systems. This has brought Erewhon in for a lot of criticism and is probably the primary reason that the book is not much read today. For my own part, I have never thought that the ban of the last 100 years of making books that are part novel and part essay has been a good one. There are so many excellent counter-examples from the 19th century that I do not understand why the prejudice that this is bad writing continues.
The real problem with Erewhon is that Butler primarily targets Victorian society. This means that his targets are often not universal, as they are with say Swift. It limits the impact of the book for a 21st reader, because much of it does not address modern problems. This is not always the case. The Erewhonians treat disease as a Crime and Crime as a disease. This satire is still as strong because our fundamental attitudes to Crime (the target of teh satire) have not shifted. However, some satires, such as the satire of Darwin have horribly aged. Interestingly, Butler satirizes Darwin by imagining the process applied to machines and machines evolving to supplant humans. As far as I know, this is the earliest use of the rise-of-the-machines trope, and it is fascinating that it is treated as an inherently absurd idea.
In the end, I think that the criticisms based on structure of the novel are narrow-minded. I found the structure refreshing, but the satire itself fails in many places or is no longer relevant, so that parts of the book do not really work. Worth reading, but not at all required reading.