It serves the purpose of giving you much-needed drawer space. It's likely meant to be a silverware cabinet but it's poor design because you can't unload directly from the DW into the drawers. You also will have trouble reaching into the wall cabinet over the peninsula. If possible, turn the cabinet and place it flush against the wall when you replace the counters.

Toby, that's exactly what we were thinking. Turn it and put it flush against the wall. Currently there is a TV nook on that wall, but we've never had a TV in the kitchen so not unhappy to remove that. That's another reason we're thinking about possibly replacing the cabinets entirely vs refacing (even though the cabinets are good quality); I'd love the replace almost all those regular base cabinets with drawers.

There's no point painting the cabinets and having the expense of a new counter if the base cabs aren't functional. It looks like you only have one drawer base on the kitchen side. Also the nook bench blocks the window and that would annoy me. So maybe you could live with what's there while you plan a remodel.

I sold my old cabinets online.

Good point. The fact that the bench covers part of the window drives me crazy too.