Depends. If you can set your PC or your VGA converter box to run at 66 or 67Hz refresh rate then no, it's still useful. The TV standard (PAL/NTSC) output from your Dreamcast isn't really any better than 640x480 even if you do throw it up on a bigger screen.
One thing though, if you run it for any length of time with that garbled image as in your first photo, it will be junk soon. The out of spec voltages can cook the internal components.