This was a significant blow to Tyrion’s plan (which, was designed to work a bit like a neutron bomb, in that it achieves victory while leaving the buildings intact).

In my recap this week, I talked about how Game of Thrones is really, to its bones, a no-nonsense application of realist political theory to the tropes of traditional fantasy. Both Varys and Lady Olenna Tyrell are hard-core realists and their cautions are probably good predictors of future outcomes (at the same time, as you point out, Olenna clearly needs to pay some more attention to her own garden).

She probably would still have the forces necessary to take Kings Landing (remember, the idea was for Daenerys not have to commit the Dothraki or unsullied in the siege for diplomatic reasons) but the loss of the navy would be a pretty big blow.

I am still a bit confused why the sailors of the original Iron Fleet were so easily destroyed by the sailors of the new Iron Fleet (especially since the original IF sailors could call on the assistance of the army of Dorne).

And I am also confused how Euron morphed the Iron Islanders so quickly from Vikings with long ships into Privateers with European-style battleships, but sometimes you just have to suspend disbelief and roll with the tides.