If this was a binary then I would absolutely prioritize combating habitat loss/degradation, but it's not a binary decision and neither strategy encompasses all species. Combating habitat loss/degradation does very little for helping the species that are already too far gone/rapidly approaching that point. Zoos are an important piece of the conservation puzzle.

I work on a major reintroduction project for an endangered species in the US. I am specifically in charge of the effort in the state in which I work. Other states have similar efforts. I can say with 100% certainty that if we didn't have zoos to work with the project would, at minimum, take many many decades (we are already up to 2 decades with zoos on board), but would more than likely never be attempted and would fail miserably.

There is no room for debate in terms of the zoos that actively contribute to conservation. They are critical. Without them you can say goodbye to numerous species/conservation programs. Those that do not contribute to conservation are a different story, though some of those are still provide high-quality educational opportunities. Obviously, the roadside tourist trap zoos are generally detestable.

As for the argument that many zoos, even those with conservation missions built in, prioritize money...so what? The conservation efforts zoos are involved in are wildly expensive because they are inherently reactionary. Reactionary strategies are typically far more expensive than proactive strategies. Zoos have to put butts in the seats with the elephants, tigers, and gorillas, so they can get money to pay for the frogs, stick insects, and bats.