The problem is that Craig never fully gives us a fleshed out account of just what an “ultimate purpose” really amounts to. Debates around the meaningfulness or meaninglessness of life tend to happen by way of two individuals assuming the concepts being discussed are perfectly intelligible and therefore not in need of explaining just *what* it is we’re discussing.
Craig doesn’t ever give us the necessary or sufficient conditions for the concept of an “ultimate purpose” nor of “meaningfulness”. He assumes we know what he’s talking about and proceeds to give us reasons as to why we lack it. A more responsible approach would be to give a careful explanation of what it is he’s claiming we lack, and then showing why a theistic universe would provide us with what he’s looking for.
So when he tells us that our lives eventually come to an end, and because they end they’re robbed of meaning, we need an explanation of just what he means by “meaning” here. Instead of giving us that, he simply gives us a few reasons why we lack meaningfulness and hoping we’ll agree, without bothering to first give us a definition of the thing we’re supposed to be lacking in the first place.
I also dispute the notion that without God there is no objective basis for moral values. Some, many in fact, atheists and naturalists (usually the ones without any background in philosophy) are happy to grant that. I don’t, however. The field of meta-ethics gives us plenty of perfectly coherent and persuasive accounts of the nature and grounding of moral values without reference or need for God to enter the equation. Moral Realism and moral Constructivism are two such views.
Craig doesn’t really work on meta-ethics, so he seldom really addresses any of the realist views in the field, at best usually just glossing them over superficially.
Nagel’s response to moral skepticism may be unpersuasive, but I don’t rely on his views about moral skepticism in this essay. I merely rely on his responses to views about the absurdity of life, which are persuasive. I can happily grant that his responses to skepticism aren’t worthwhile, because I find other responses by different authors to be perfectly sensible.
I just don’t find anything in Craig’s position here to be defensible on philosophical grounds, at least not defensible in the ways Craig attempts to argue for them.