Istihsan in this passage refers to an unsupported legal preference: someone finds a result appealing and attributes it to divine law without adequate revealed authority. The term is used technically in other fields of legal theory, and that wider debate should not be confused with the specific criticism made here.
Suppose someone argues, “This rule seems socially useful; therefore God definitely commanded it.” The first part might be a human judgment about benefit. The second is a claim of revelation, which needs a different kind of evidence.
Assessment of public interest is not inherently wrong; presenting private preference as binding revelation without method or proof is the defect at issue.