It’s very interesting how Foucault fans think he won. He only kept trying to move the point of the conversation to madness and how the powers that be used it. Perhaps it’s a good example of fanaticism vs old school reasoning. Chomsky didn’t “win” because the conversation was constantly derailed. It was a waste of time. Don’t try to reason or debate fanatics.
I'm not a Foucault fan, and I used to hold the same opinion as you. But now I realise the exchange was, as you say, a "waste of time".
Chomsky doesn't seem to have read up on the issues Foucault is talking about, and he admits as much in an interview on the topic, about how he was surprised that he could not find /any/ common ground from which to build a conversation with Foucault.
This is more of a failure of communication on the part of French intellectuals, who use verbose language helps keep their radical tradition so insular.
So... it's what you would expect an exchange between the analytic and continental philosophers to be like. Chomsky takes the enlightenment humanism tradition for granted, and assumes he can find common ground with Foucault there, but Foucault had been working in a tradition where the humanism vs anti-humanism debate (e.g. Althusser) was front and center.
In fact, Foucault himself was on the anti-humanist side. (anti-humanism doesn't mean "evil", it's just an unfortunate
tongue-in-cheek terminology). What you end up with is Foucault trying his best to introduce Chomsky to the basics of a core part of the French intellectual tradition, more-or-less unsuccessfully.
What the debate highlights is the extent of the divide between continental philosophy and analytical philosophy. It doesn't make new ground.