Looks like a perfect commuter bike to me. A lot of "hybrid" bikes (MTB gearing with 700c wheels) have more recently evolved into what are now being called "comfort bikes" and are really inferior to these earlier and more rugged and roadworthy bikes. The derailleurs are easily replaceable if they should ever break or just wear out. I think the front derailleur shifting problem might easily fix on this bike. It could be the actual shift mechanism, but may be something as simple as a kinked or corroded cable.

If I were looking for a dedicated city/commuter bike these days, this bike would be pretty much ideal for all my needs too. The main issues I have with flat bars would be the width - which I'm simply not accustomed to - and the upright riding position - which you are always forced to accept. This seems like a perfect candidate for drop bars.

Enjoy!