The point is the council did not have plans for the builidng and allowed the squatters to live in the house rent free, as an occupied building is always going to be better than an empty building they were providing a service to the area. When they were recently were asked to leave they did, to make way for high cost housing that no one in the local area can afford (it can only be assumed). So selling the buildings of has made them a lot more out of bounds for people than they were when they were squats (ie squating has not taken up hosing stock increasing the price of other houses, its private ownership aimed at high earning clients that will raise the price of housing).
I cannot see how you prefer the second option to the first. While we would all like to live for in a house for free we don't because most of us prefer the safety and comfort, living in a place we can call our own. But the world is not as dull as that and some people for whatever personal reason choose to live in unoccupied builidngs which would otherwise be unused.
The fact that you think luxury housing in an area is more preferable to an community art center speaks volumes about you. People need more than just housing we need areas to get together, interact, create and so on and so forth. If the whole world was just made up of houses and shops, which quiet a few places are, we would not get the chance to do any of the above. Please try to understand that not everybody is like yourself and since no harm was being done by these squatters, a live and let live attitude should prevail.