Ah, thank you; I've been waiting for someone to bring up the story. I could write an essay on why Reach's story failed, but you hit most of the major points: the third-person/first-person thing, the unrelatable characters, the arcane self-reference to the expanded universe and following games.
Here's the thing: whoever Bungie has designing this world is good at his job. I've gotten lost for hours on Halo Wikis reading about the fictional history of the Covenant, or the Spartan program. The backstory has some legitimately strong themes at play, like religion, class struggle, imperialism, militarism, and the value of sentience.
On the other hand, whoever Bungie has writing their games is fucking terrible. In lieu of writing how actual people talk, all they can do is write more and more pseudo-military jargon. To compensate, they slap every speaking role into power armor or some other military uniform (or, failing that, make them speak a language we don't understand.) ODST was supposed to be set in a human city, but it looked more like an ugly fortress, and you never saw so much as a civilian corpse. I think it says a lot that the civilians in Reach seem to use the same AI script as the dumbass ostriches that run screaming back and forth aimlessly across your line of fire.
And so, because Bungie doesn't know how else to get its hands on our elusive heartstrings, they just start systematically murdering Noble Team, in descending order from most to least sympathetic. By the last mission, it's just you and the two blandest of the bland. And after you see Cortana, all pretense of a futuristic military shooter flies out the window and we're back to Halo 3's "Dragonball Z with Guns" tone.
I did find the post-credits level to be the most poignant part of the entire franchise, however.
