It was absolutely really that devastating, but with a caveat that I'll get to at the end. Still, it was not a mere case of public hysteria about something that was otherwise not that big of a deal.

In fact, not only was it a problem in 19th century China, but it was a problem in 19th century America as well. In fact it's increase in use was a major argument being pushed by those in support of Chinese Exclusion from the US. Quoting here from The Opium Debate and Chinese Exclusion Laws in the Nineteenth-century American West:

Newspapers often shared reports about opium because the controversy surrounding the narcotic helped fuel the anti-Chinese debate. … In the 1870s and 1880s opium smoking among Anglo-Americans grew, and journalists, bureaucrats, and medical practitioners sought the eradication of the substance and cited its use as strengthening the argument favouring Chinese exclusion

Within China's borders, it had long been recognised as having an adverse effect on the population, illegal since the early 1700s. While there were unquestionably benefits to the drug as a pain reliever (among other medical uses), its addictive properties had been identified early on.

The problem with opium at this time was that no one really knew what it did and didn't do. There was a lot of misinformation, speculation, and conflicting reports about its effects both positive and negative. What was known was that it was highly addictive, led to people not doing jack with themselves, and that it was fatal if too much was taken.

The same people who were writing about its benefits, composing poems to the state of mind it put them in, were also writing about the evils of the drug and what it did to people. One such person was the future Daoguang Emperor himself, who later while in power would become involved in the Arrow War.

Still, life was incredibly hard for the average person in 19th century China. There were the Hakka-Punti Clan Wars in the south, the Taiping Civil War which devastated the whole country, the Opium Wars (which intersected with these other events), significant famine, the relocation of large populations, people leaving to find better opportunities in California and later Victoria, and just general bad situations coming out of these. The average labourer wasn't making enough to progress, and often were working themselves close to if not all the way to death. Opium provided a form of relief from their physical pains, and escape from the other pressures. Stories of family members smoking away the entire family's wealth are not uncommon.

In addition to all of this, the people who were meant to be enforcing the ban on opium during that century were themselves involved in the smuggling of the drug in through Guangzhou, most usually in the way of taking bribes to look the other way. It was simply too profitable to do so.

Now the caveat I mentioned above:

While opium was absolutely a social ill of some significance at the time, both in China and abroad, in places like the US and England it also became an easy scapegoat for the ongoing anti-Chinese sentiment, and provided the main anti-Chinese actors in places like California an easy focus for their race-based fear mongering, despite the fact that the actual issue (xenophobia aside) was primarily economic. The conflicted stereotypes of the deranged, scheming, lecherous (but also impotent and idiotic) Chinese was heavily backed by the association of opium use with Chinese immigrants, even though white Americans were just as easily found in opium dens in the West. The notion that opium was around solely because of the Chinese was a widespread one. So the caveat is that, while it was certainly an issue in China, it was also repurposed and reshaped to suit the anti-Chinese narrative that had been developing in places like California since at least the 1860s.

If you're interested in the period and the situation around Opium, I highly recommend Julia Lovell's The Opium War: Drugs, Dreams and the Making of China. It's a really good account of the history of the Opium Wars, the events leading up to said wars, and then also the effects and perceptions of opium in China and abroad in the longer period after the wars.

tl;dr: Yep.

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Further reading:

• Ahmad, Diana L (2007) The Opium Debate and the Chinese Exclusion Laws in the Ninteenth-Century American West

• Hanes, W Travis III; Sanello, Frank (2004) The Opium Wars: The Addiction of One Empire and the Corruption of Another

• Lovell, Julia (2011) The Opium War: Drugs, Dreams and the Making of China

• Wong, J Y (2020) Deadly Dreams: Opium Imperialism and the Arrow War (1856-1860) in China

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Note:

This is a little rushed because it's late. I'm heading to bed now so if you have follow up questions or want me to expand on anything, let me know, but it might take me a good few hours to see it.

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p.s. Nudging the 20 year rule: There are still places where opium use is widespread, to the extent that is written about in accounts of opium use in China in the 19th century, and the negative effects on societies and individuals are still just as apparent as they are in the historical accounts. There is likely some sociological/anthropological literature on this if you're interested. It would probably not be too hard to find with some digging. There's certainly no shortage of news articles about it.