From a gameplay point of view, it was a large improvement over Mass Effect.
Even the simplified inventory management was almost perfect: you're in a *technological* society, why do you have to loot every scrap of potentially valuable crap off of enemy bodies like you're in the aftermath of a medieval battlefield? The only important things are credits and information. Stuff can be manufactured, almost at will.
Yes, the thermal clip nonsense was painful. "We need to add an ammo system since we're changing it into a cover-based shooter and the recharge over time function breaks because of the SMG weapons we want to introduce." They could have gotten around that problem by, you know, not introducing the SMG that no one really used anyway.
But it failed horrendously when it came to the story. Yes, failed. Seamus Young has a Mass Effect Retrospective series which points out the massive shift in tone and understanding between Mass Effect and Mass Effect 2. It went from a detail based, finely crafted story where elements presented early on (and I'm not just talking about the Conduit) become significant in the story later; to a "durr Drama!" soap opera based around family issues and "Humans are Special!" propaganda. The shift in tone is horrible, moving from "humans are resented newcomers who don't really fit in to galactic civilization" to "human issues should be THE galactic priority for EVERYONE".
The Reapers don't even make an appearance except in a thirty second cutscene at the end and at the end of some DLC that you might or might not purchase. And worse, they go from "mysterious space cthulhu with unknown motives" to "fourteen year old boy hurling childish taunts at the player who's slaughtering his pawns over and over and over."
The set up at the end of Mass Effect perfectly laid out the parameters of a sequel. Shepard has a team, she has a ship, she has a mission, and she has the support of the Council and the Alliance. There's even a vague path to follow; the second game in the series SHOULD have been about finding out more about the Reapers and their weaknesses, exploring prothean and other precursor sites to find hints, clues, anything to fight the ominous space cuttlefish. All the while learning about other alien cultures in order to build connections and prepare for the day when the invasion happens.
So what happens immediately in Mass Effect 2? Shepard dies, she loses her ship, she loses her team, she is forced to lose the support of the Council and the Alliance, and her mission is hijacked to deal with the major agenda of a terrorist organization rather than finding out *a way to stop the Reapers*.