To me, it was like Red Dead Redemption:
Too much spectacle, not enough depth of gameplay mechanics.
Yes it had a million things, but so many of them were shallow like buying a house, getting married, buying a whole district, collecting rent, working in a blacksmith, and so on, but none of them had [enough] depth.
Yes, I laughed at all the clever jokes hidden in the game, I loved watching my Hero flow through battle as if he were dancing in a very deadly manner, and I channeled my inner fashion designer when I dyed my clothes.
It had so many little details, but it just didn't quite have a strong enough core. The story was alright and the individual aspects of free roaming were alright, but none of them left a particular impact on me.
I think Peter Molyneaux had a great idea on paper, but the execution was diluted by the time it reached the game. Now, Fable 2 was not a bad game, but it was underwhelming. It was underwhelming because it had so many things to present me, and very few of them impressed me.
Games like Halo (not including anything after 2) and CoD4 were smashing successes because they had one impressive act. Halo brought vehicles and shields to multiplayer arenas while CoD4 made the first (impressive) splash into modern warfare and Gears of War made practical the now-standard cover system. Now I'm not saying that these video game tropes are any more prone to succeed than any of the aspects that Fable 2 tried to use, but rather that in these 3 shooters, they were employed with an unrivaled level of mastery.
Fable 2 simply tried to cover too much ground, and as a result it had no particular aspects that shone.