Observables have to be gauge invariant, but clearly the spacetime interval:
$$ds = g_{ij}dx^idx^j = (\eta_{ij}+h_{ij})dx^idx^j\tag{1}$$
is not invariant under a transformation:
$$ h_{ij} \rightarrow h_{ij}+\partial_i\xi_j+\partial_j\xi_i\tag{2}$$
Since:
$$g_{ij}dx^idx^j \rightarrow (g_{ij}+\partial_i\xi_j+\partial_j\xi_i)dx^idx^j\neq g_{ij}dx^idx^j\tag{3}$$
So how can (2) be a valid gauge transformation?