We have similar chess history, but I think you're being emotional here in your "rebuttal of chess". I've had similar thoughts but I've come to the natural conclusion that all that matters in the end is whether I enjoy playing it or not.
Some things you mentioned don't add up. You don't have to be a human database to play chess as a hobby, even at club level. Playing at club level can be fun, and can definitely be a healthy hobby which doesn't take more time than any other sports or any other gaming activity. If it's not fun for you, or if you obsess over how better you could get if you just studied this or that opening, or how you'll never even reach 2200 ELO, then chess is probably not for you or not fit to be a hobby for you, that is true.
In short, thinking you would gain more mentally that would help with your engineering skill-set by playing chess instead of just, well, studying and working as an engineer, is fallacious to begin with. If there aren't any such studies, which I doubt, then why would you assume that? Of course, if all you want to do in life is being a better engineer, then anything but doing that is a "huge waste of time", not just chess.
But I think I still understand you emotionally as we had similar thoughts. Maybe, like me, you too rationalized your time spent in chess by saying to yourself that it helps your focus and concentration at work etc., but that's really not any more logical than rationalizing smoking, in the end you're just fooling yourself spending time doing something you enjoy. I'd think this was obvious, and I knew it even when as I was doing it myself. Maybe you just needed that external heads-up, from that older engineer you mentioned.
On a completely different note, I could still argue chess is not entirely useless in that sense. Compared to legos, you're forgetting that chess is a social activity. You're facing real people, and beating them can build confidence, and losing also has its lessons - socially, not chesswise. I've learned a lot about competition at a young age, and I've experienced what "winning" and "losing" is like. This is different than team sports, because you're out there alone by yourself, with no luck involved. And although we don't share the same success with him, a friend who doesn't spend more than a few hours per week playing chess became rather successful (2000+ ELO), and I see that it made him a lot more confident. Also for what it's worth, a lot of people - you may find the notion stupid - perceive him to be a very smart person, which is pretty valuable socially. I think that is an incredible value gained for that effort, arguably more efficient than a college education considering all this talk nowadays about the bubble.