Well, local people probably care about economic development and don’t give a rat’s ass about astronomy. So the question becomes, who’s going to compensate for the loss of economic development? (By local I don’t mean strictly local, in case of counter arguments along the line that there are no/very few local people to begin with.)
Disclosure: I’m a former physicist and I have personally operated an optical telescope with a 15’ dome, as well as a 60’ radio telescope, which probably puts me among 0.01% of world’s population. So I do know a thing or two and care about astronomy.
Whether the facility is built there or 50 km away, it's going to have to draw people from more than a few km away. The entire Taltal district only has about 11,000 people.
At Las Campanas, most of the staff from the cooks to the techs and a number of the researchers were all local. I found quite a bit of interest in the country as a whole as it's a source of national pride being the best location for astronomy.
Allowing this to proceed will affect _all_ future astronomy projects in Chile. No one is going to splash out on a shiny, new 100m optical telescope (OWL) if anyone can come along and park a city's worth of light just down the road.
My understanding is ESO uses local labour where possible (e.g on building the ELT, maintenance, catering, transport), so it's not like it's one guy in a shed, there are jobs and economic benefits. That's why this seems so confusing to me, I can't see why you can't have both?
If most of the local people are going to move to that location, they could also move to a different location which is a bit further away from where it's planned now.
Disclosure: I’m a former physicist and I have personally operated an optical telescope with a 15’ dome, as well as a 60’ radio telescope, which probably puts me among 0.01% of world’s population. So I do know a thing or two and care about astronomy.