If there is a frame builder in your area, ask them what replacing that chainstay (and a repaint) would cost. This is not an exotic or extremely valuable frame so determine if the cost of the repair is justified to you. And, yes, I agree that frame is going to fail if not repaired. When, who knows? A broken chainstay will certainly end your ride but is unlikely to cause a crash when it happens. That said, if it were mine I would have it repaired sooner rather than later or replace it.