Vagueness is power. Power to decide which information can and can not be published. It is a vast power - with one wave of a hand and saying "public interest" you can completely disappear one piece of knowledge (e.g. that government official X did illegally wiretaps and practiced torture) and retain another (e.g. that vocal opposition activist is accused by X in some heinous deeds - while simultaneously wiping the information that X himself is a liar and a criminal that can not be trusted). Of course whoever is engineering this system would not want to give up this enormous power by strictly defining the bounds - why would they give up power voluntarily?

Yes, that means that European courts can come to any company and demand any information to be deleted as soon as "public interest" requires so. That's not the flaw - that's the whole point of it. That's control.