No. It really, really isn't. An annotated bibliography is an alphabetized list of all the sources you have read with a short summary given for each one. It might take a long time and a lot of work to do your annotated bibliography. You have to read all the sources, figure out what they say, and then summarize that in reasonable prose. But this does not take much critical thinking and it does not require you to do anything original, which is why you will get comments like 'needs development' or 'not a literature review' or 'no critical voice here' if you just convert your annotated bibliography into paragraph form and think you are done.
In an annotated bibliography, you don't have to analyze what each source said and come to any sort of view about how the findings and conclusions from each source relate to each other and to your particular research question. Neither does an annotated bibliography require you to formulate and structure an argument. The only organizing principle behind an annotated bibliography is the alphabet, so you don't actually have to do any thinking to organize it -- all you have to do is know the alphabet and the surname of each author. You don't even have to know what the summary of each source says to organize your bibliography, because the alphabet has nothing to do with the summaries. In addition, while the summaries might take some time and thought to formulate, they are not original. Your annotated bibliography records what other people have already written, but does not do anything new or original with that information. You repeat existing knowledge in an annotated bibliography -- you do not transform it into something new.
So the annotated bibliography is not the same as the literature review. In the literature review, you need to synthesize the findings from each source as a body of literature. If you start sorting the findings and putting like with like, what major patterns and trends emerge across all the findings? Why are they important? If you put all the findings that seem similar (because they all point in the same direction, or all claim basically the same thing, or all flow from the same flawed assumption, for example) together in a column, what label would you give that column? This label will be original to you, as it represents your idea of why that group of findings matters. And you'll find that it will relate to your research question, as well (maybe not at first, but it will after you keep thinking about it and experimenting with different labels). After you sort all of the findings from previous sources into labelled columns, you will have identified the major patterns and trends in the existing body of work on your topic and how they add up to the need to ask your research question. And this is what you need to establish in your literature review: why your research question needs to be asked.
So is the annotated bibliography a waste of time? No. It is in fact a very good use of your time, and an essential step on the way to writing your literature review, which is why it is so often assigned as a task. You do have to read each source, and you do have to know, and really understand, what each one says -- what its main argument is, what particular perspective it represents, what it used for evidence, how it proceeded, and so on. While listing all this out is a good way to get your head round what you've read and a necessary step, it does not result in a literature review. It is just the first step, and it does not require any critical thinking on your part. Once you have a list of what each study you've read found (or argued or concluded), then your real work begins, as you have to determine how all these findings serve as evidence in the argument for why your research question needs to be asked. And once you have determined that, you need to figure out what order to put this evidence in, that is, how to structure your argument. This order will be based on your ideas, the patterns you have found in the previous findings and why you thought they were important. This is what requires you to use your critical thinking skills, and it has nothing to do with the alphabet. So honor the annotated bibliography. Do the task with care and respect. But don't confuse it with the actual literature review.
