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I get why people gush and croon over gen 1, whether it be nostalgia or a severe case of counter-culturalism, but gen 1 does have some things going for it. I think the artwork at that time was more stand-outish, so back then, when you saw one of Sugi's watercolors, it looked cooler, and thus influenced the image of the pokemon in your mind. The atmosphere at the time was different, again enhancing the mood. Monster collectors were everywhere, but none were that good. And then BAM, along comes Red & Blue, fulfilling the desire for that "good" monster collecting game. Also the fact that it was the first project of its own series gave it a cohesive feel. You don't leave Red/Blue expecting more, because it's all encapsulated within the adventure. You explored the region, catalogued 150 pokemon, took on the mob, bested Mewtwo and became champion battler. What more could you ask for in a single adventure? Nowadays the expectations are higher and designed with sequels in mind, so the games leave people looking for more.
tldr; gen 1 had good style and a good background to it, something that the content itself (R/B) enhanced. The background behind the release and the atmosphere of gaming at the time, combined with the game itself, gave Red and Blue a very satisfying experience. One that was enhanced more by your own imagination, fueled by Sugi's art.
It's like when people randomly pick up an older novel, read it and claim it's shit, with no background of literature at the time, the author, or the audience.
Gen 1 isn't "shit". Of course it's not as good as pokemon now, but it had/has a lot to offer then and now, you just have to understand it properly.
Like the type thing, Ghost and Dragon types being so rare is typical of any JRPG having rare enemies/weapons/elements. But you wouldn't understand that now because you probably weren't playing games at the time.