The Big Lottery fund in Wales said the Wisdom Bank site was funded to share knowledge, and had "met its targets".
After its funding ended last year, Torfaen council took it over.
But the site is currently down because of a "temporary technical issue".
Mike Harris, a councillor on the authority's audit committee, said continued public funding of the site would be like "flogging a dead horse".
Big Lottery said in a statement the project aimed to "harness the experience and skills of people in the 45 to 65 age group for the wider benefit of the community of Torfaen".
"This will be achieved through the development of a web-based Wisdom Bank providing online, interactive, one-to-one advice and mentoring in a secure private environment.
"Initial support will be targeted at entrepreneurship, employment support for young people who are NEET (not in employment, education or training), care leavers, support for carers and for people with long-term health conditions."
The project aimed to recruit 60 mentors and support 500 individuals.
But despite claims it has "met targets", Torfaen council said it currently has 340 users.
Mr Harris said no more public money should be spent on the site unless it can prove its worth.
"Big Lottery would have looked at the business plan and you have to question their judgement with such a risk," he said.
"£250,000 to use a web portal to engage with an audience of 340 doesn't seem good value for me, when you can actually engage with them through social media such as Facebook.
"It's an embarrassment if it continues - I think serious questions need to be asked because now they'll be using taxpayers money to continue with a project.
"If it's a dead horse I'm afraid there are far more worthy causes that money needs to be spent on."
A Torfaen council spokesperson said: "Torfaen Public Service Board sees the Wisdom Bank as an innovative digital platform for engaging with the local community...the council is now overseeing further development of the platform.
"There is currently a technical issue with the site which will be fixed as soon as possible."
The Wisdom Bank's Facebook and Twitter account have not been updated since last summer.
A website awarded £250,000 to "unleash the wealth of wisdom" of people in Torfaen has been criticised after registering 340 users in two years - a cost of over £700 per user - before going offline.