"It would be well for us to admire what is worthy of admiration in
such a people, rather than to carp about their errors."
It would be well for us to admire ~ we should admire
what ~ that which
is worthy of admiration ~ is admirable
in such a people ~ in a people of that character
rather than to carp about their errors ~ instead of finding fault with them
We should admire that which is admirable in a people of that character instead of finding fault with them.
NOTE: such there means "of a kind|type|variety|character|sort previously mentioned or implied".
What don't you like about such a hat?
-- It is made of rat fur.
What don't you like about such a dog?
-- It eats too much.
What can one say on such an occasion?
-- Gesundheit! Do you need a tissue?
What should we do in such a storm?
-- Stay indoors.
Why are you in such a hurry?
-- I'm late for an English exam.
To my ear, such feels as though it is modifying the noun-phrase—that such is not nominal and is not itself the object of the preposition that precedes it. It feels like a demonstrative: the indefinite article raises "hurry" to hurries of any and all kinds and such narrows the set down to this hurry you are in right now. "Why are you in this particular hurry?"