Well, for starters, it's in contravention of the Refugee Convention. Which, okay, the government has never had any intention of following.

Also, it's abrogating Australia's responsibilities, and "off-shore processing" in Malaysia is no better than "off-shore processing" on Christmas or Manus Islands: it just continues the same behavior and lets the government blame Malaysia instead of its own incompetance. Which as a result could be seen as blame-shifting onto a non-white society 'cause that makes it "easier".