I think the fatal flaw is that Lucas obviously got the wrong end of the stick as I feel he was really trying very hard to please the fans of the original trilogy.
I think he failed to recognise that the majority of the fans have grown up, and now watch grown up films. He tried too hard to make it feel and look the same as he thinks we see it ie: deserts(tatooine), Jedi in robes, R2, 3PO, sideous robots, spaceships, lasers. But to us with it being such a big part our childhood it means a whole lot more than this, probably more than it should and really would of been impossible to fully please and delight.
It would have been something truly amazing if he had pulled it off. I feel he tried to throw everything from the originals he could get away with throwing in so we would all feel "MMmmm Star Wars".
But by doing this it ultimately made us all feel "AAHHH Star Wars!"
He would of been better rethinking it and making it look less like Star Wars as it were. Change locations, change costumes make the whole story line more grown up.
Then after everyone moaned about TPM he tried again with AOTC. You can plainly see that he tried then to tone down certain elements (jaja, comedy) but up others (Anakin being bad!, battles). But I feel because of TPM the damage had already been done and we all realised this is never going to be like we all felt it should have been and could never be.
I thin by ROTS he got to the part we had all actually wanted to see from the start,( I dont know anyone who really thought of the story of Anakin the little kid was going star the prequel trilogy), the Obi and Anakin duel and the masking of Vader, but once again he did what he thinks we wanted to see and mucked it up again.
I'll never forget my missus laughing as Vader went Nooo! and did that funny walk (ministry of) and now he's put into the OT!
Dont get me wrong it did work on some levels ie: young kids bought into it, merchandising and so'forth which I think really that is what Lucas has become best at, the business of making money not movies.
In the early days Lucas was helped by the people around him being people, the effects team were did things there way, he had others rewrite the scripts and add their 2 cents worth in, he had others edit the movies and suggest ways they felt better. Now I dont think anyone does.
Ultimately I think Lucas should have handed over the reigns to another team to take it on, people who didnt have such a vested interest as Lucas does, who Ihave no idea.
I think maybe one day, I hope in my lifetime (I'm 38), some'one will do a remake and it might be quite good.
So stick that in your pipe and smoke it.
Ps: I really do love Star Wars and readilly watch all the movies over and over. But my kids are'nt as keen ( "Oh no not again Dad")