So many of you have already made really good points in this thread. I can only summarize what has already been said in my own fashion.
I think the "fatal flaw" was that Lucas should have done the PT back in the 80s. Instead, he waited for CGI technology to develop and he ended up heavily relying on it. Then he felt compelled to rework the OT. That was a bad idea.
When I first saw the PT, I didn't expect much because I knew the context: Star Wars is a tribute to the cheesy sci-fi serials. And I enjoyed and didn't think too much about it. I was actually annoyed at all of the extreme criticism. But then I started to deconstruct them. And I realized the important thing that RLM pointed out: who is the protagonist? RLM really nails it and I can't top that criticism.