If you step back and ignore some of the specific details, the entire story arc for the entire thing was generally very good, IMO. It's just that some of the specifics and/or the execution went really off the rails.
That too, though I maintain that having a trade embargo on Naboo as being the catalyst for the creation of the Galactic Empire, and being the crux of the whole first movie, is rather..... dunno, can't find the right word for it.
I think the tension and urgency was lacking. In Ep4, within the first 5 minutes, we see soldiers board and mow down the crew of a ship, stun and capture a youthful rebel who stole plans from them, and a massive, creepy dude choke to death someone who won't give him the answers he wants. You know right off the bat the stakes are high. EP1 just never felt that way with a couple Jedi trying to resolve a trade dispute, despite all the action that takes place toward the start of the film.
Later in Ep4, creepy British military types are sitting around talking about blowing up whole planets, and then the head creepy dude does it just to prove a point in front of a girl after torturing her for information didn't work. Millions of Alderaanians are killed in an instant, and though we've never even seen teh planet, it resonates with us. As Ep1 progresses, do we ever feel that connected to the plight of Naboo and the Gungans?