Myanmar is one of the most important current challenges facing ASEAN as an institution. There are two challenges, as I see it.
One is internal, in the sense that among member states there are differences in terms of how much to engage the regime, for example. There is some unhappiness about the Myanmar regime in terms of its responsiveness and its ability to uphold past commitments with ASEAN, for example. The first legitimation challenge is internal, in the sense that ASEAN unity is important.
Second, I think that the Myanmar challenge is an external legitimation problem, in the sense that, as I think the question itself suggests, others look at ASEAN and see an organization that hasn't been able to effectively contain the problem or solve the problem.
This said, I want to emphasize why, for example, ASEAN continues as an organization, despite its differences, to maintain channels of communication with Myanmar. It has not completely cut off Myanmar by any means, actually. That is because there's a strong belief that if you leave a Southeast Asian state by itself, it will be all the more vulnerable to being manipulated and dominated by other actors.
ASEAN remains an important organization that helps to carve out options and pathways forward for challenged states.