Here's what you're trading for the alertness feat if you don't take the abil score upgrade and instead take the feat:
- +1 to damage
- +1 to hit
- +1 to AC
- +1 to Dex saves
- +1 to Dex checks
- +1 to init
The question then, ultimately, becomes, is +5 init (net +4), no surprise and no advantage on attacks against from hidden opponents worth it.
The latter two features are very dependent on your campaign and DM. Surprise should be a fairly frequent occurrence on both sides of combat, but that still depends on how willing your DM is to allow it or stage his monsters to have them obtain it (and kind of how cautious your group tends to be). Monsters attacking from hidden is another one that really depends on your DM, you group and how well you guys are at nosing out monsters from the shadows.
So ignoring those two items since they are DM and campaign dependent (and thus can't be weighted objectively), the question then becomes, is +1 to Dex more or less beneficial over 4 levels than +5 to init.
For pretty much any character other than the Assassin Rogue, I'd probably argue that they should take the stat upgrade early, the feat at L8 and then the last stat upgrade. However +5 init has amazing synergy with the Assassin Rogue and you're going to get a ton of mileage out of it.
If you're already at 20 Dex (if you managed to start at 20, or 18 and are at L8), then there really isn't any stat upgrade that is worth taking over this feat (though there may be better feats). Rogues are skill monkeys, yes, but +5% in a single ability set of skills is not worth the +25% to initiative and other features o this feat. The only one that would be worth considering at all is Con for the extra HP, but it's really not that many and you're better of boosting your damage significantly.
Take the feat at L4 (or even better, play a human and take it at L1).
No, you cannot choose to get a +2 ability improvement instead of a feat
No rule exists allowing a feat to be replaced with an ability score improvement. Instead, the opposite is true:
At certain levels, your class gives you the Ability Score Improvement feature. Using the optional feats rule, you can forgo taking that feature to take a feat of your choice instead.
Page 165 PHB, Feats
Thus, the class feature Ability Score Improvement can be replaced with a feat and feats cannot be traded for ability score improvements. It should also be noted that this rule specifies that the trade can only be done with the specific feature provided by your class only, making ability score improvements from racial traits ineligible for trade.
Best Answer
Balancing Your Feat
I don't think it's terribly well balanced; in most cases, it's actually weaker than a feat:
If you take the first option twice, it's the same as a basic ASI.
If you take either the second or third option, it is strictly weaker than Skilled (PHB p170), which allows choice of three skill or tool proficiencies.
Take the first and last option, and it's weaker than Linguist (PHB p167), which provides +1 Intelligence, three languages, and the ability to create coded messages.
Feats are supposed to be powerful, and your design is watered down in comparison. Feats also tend to be packaged abilities with a theme, selecting one makes a character different from others with the same class. Were I playing in your game, I wouldn't take anything but the ASI, which I could do anyway.
There are also stacking concerns - normally, the same feat cannot be taken more than once. If this is the only feat available in your game, then it's clearly stackable. It allows a player (over time) to stack a large number of skill proficiencies, potentially having proficiency in everything, which will trivialize skill checks and reduce each character's uniqueness.
The Power of (Variant) Humanity
Variant human is pretty powerful, but so is a normal human. I think you're overlooking the raw strength of solid attributes. Having a bonus to six stats shores up potential weaknesses and/or saves points the player can spend on the character's desired strengths.
New Player Advice
If you're trying to ease new players into the system, you could disallow "Variant Human" completely. That would push off selection of feats until L4 at the earliest (if you allow them at all, they're entirely optional), and allow some time for people to get used to the basics.