But on to the plot relevance, well Ornstein may seem weak, but let's not forget his specialty is dragonslaying.
Also let's look at the implications of both scenarios.
If Ornstein is an illusion, then he was created by Gwyndolin. Why would Gwyndolin pick Ornstein in particular? Why not Artorias, or why not all Four Knights?
If Ornstein is real, then he must either be going along with Gwyndolins plan and therefore is working with Frampt to preserve the Age of Fire, or he is also being fooled by Gwyndolin just like the Chosen Undead is.
My theory is that Ornstein is real. For one, if that isn't the real Ornstein, then where the hell is he? He'd be the only one of the Four Knights unaccounted for that was an illusion. Two, Ornstein is very likely to cooperate with Frampt and Gwyndolin on their quest to perpetuate the Age of Fire, which is what his Lord, Lord Gwyn would have wanted of him. Lastly, if Ornstein is an illusion, than how did Gwyndolin get a hold of the Leo Ring?