Meh, he has no power, even against LHP.
Ideally, Tena takes his spot
Tena hits from the wrong side, same as Darren Baker. Not useful as a pair to Luis Garcia.
Vargas is slashing .277/.311/.366 versus lefties. Not awful for the short side of the platoon, especially when Garcia isn't so dreadful versus LHP that he can't play against some LHP if the staff thinks he matches up well against them.
I don't think Vargas is "good" as much as I think he is a good utility player who can adequately field 2B/SS/3B and cover starts against tough LHP. And while Jose Tena didn't have a drastic platoon split, his SSS splits so far this year along with his glove may also favor keeping a solid glove backup who can hold his own against LHP.
Vargas is also cheap. Even in his final arbitration year, I can't imagine his contract being so high the team wouldn't mind ejecting him at the deadline next year should they be competing and see an upgrade.