The first generation of Pokemon is extremely overhated these days, and I don't know why the trend began. I'm assuming it's because of a lot of the older fans clashing with newer ones around 2009-2012, especially just after BW's release. Around that time, a lot of fans were facing a bit of shock with the art style shift, and there was a lot of clashing between different "factions", so to speak. From a historical perspective though, the way the stigma stuck feels weird. It seems to be a case of people failing to separate the person from the game, leading to a lot of confirmation bias as new discoveries are made. It's kind of become standard to despise the original generation where so much history came from. Even on the competitive level, Gen 1 has this really weird stigma for being a "luck-fest" or "skill-less" when it's so, so much deeper than that. While teambuilding isn't that difficult, actually being good at the game has a steep learning curve.
I’m not sure if this is going to be an exact answer, but I wanted to add some of my own thoughts and opinions here.
First of all, regarding the clash of older and newer fans. I have been a fan of Pokémon since gen 1 but I prefer the newer generations. My favorite is Gen 5, but I am also a fan of Gen 6, 7, 4, 8 and 3, I like them all after Gen 5 in that order. My least favorite is Gen 2 while Gen 1 is my second least favorite. I guess I’m an older fan who likes the newer generations better.
I got burnt out on Pokémon during the latter half of gen 4, then I got back into it in 2011 thanks to B/W. They are special to me because they are the games that got me back into Pokémon and restored my interest in the series to higher levels than it had ever been before. My interest has since then fallen again (mostly starting with OR/AS, it has then continued from there) and only a miracle can restore it again at this point. But that’s for a different discussion. Anyway, when I got back into Pokémon in 2011, B/W and gen 5 received a lot of hate. I have seen some people make comparisons to how much hate S/S received after the reveal of dexit, and while I don’t remember it being that bad myself, I think it was still pretty bad. A lot of the hate was just nostalgia-blind hatred for the new Pokémon, something that seems to happen to every new generation after gen 2. I guess that’s not very surprising though. I remembered that it had happened before with gen 3 and especially gen 4 where it seemed like everybody hated the Sinnoh Pokémon, especially many of the new generations to older Pokémon. In comparison, gen 1 and 2 got next to zero hate or criticism for anything, they basically got a free pass for everything.
Because I liked Gen 5, seeing it get so much hate from other fans and the fandom on the whole made me angry, and in return, I had to let out my anger on something I didn’t like. Which happened to be Gen 1 and 2 as they are my least favorites. I couldn’t hate gen 3 and 4 since I liked them (except HG/SS which are utter garbage and the worst games in the series) so I directed my anger towards Gen 1 and 2 instead. Which one I disliked the most varied from time to time. I think it was Gen 2 at first (mostly because of HG/SS but also because of G/S/C), then Gen 1 because of annoying former Pokémon fans hating the newer generations, then Gen 2 again due to its massive gameplay issues. Currently, Gen 2 is my least favorite, but with that I mean both G/S/C and HG/SS. I am mostly critical towards HG/SS nowadays but I can criticize other generations too for issues they have, not only gen 1 and 2 but also gen 3-8 as well. In general, I find it easier to write lengthy posts about things I dislike in games rather than things I like. I would probably have an easier time making a post where I thrash HG/SS thoroughly than a post where I praise B/W and B2/W2. That’s a bit weird, but that’s how I feel.
Now that I look back at the above, I guess it is a bit stupid. I shouldn’t have been so negative towards Gen 1 and 2 because others were negative towards the newer generations, I should have tried to be more positive instead. Being positive instead of negative and spreading love instead of hate is a better thing to do. But I guess it was hard to do because of how the Pokémon fandom works, always whining and complaining about everything. I guess this post just contributes to that even more. I should start working on my next post in the likes thread instead to compensate and in order to spread more positivity. That said, I try to be positive when I can. During the Gen 5 days, I wasn't afraid to say positive things about Gen 5, or Gen 3 and D/P/P. Nowadays, I try to be positive to the games I like, but it isn't always easy. I can also give some praise to the few things I actually do like about gen 1/2 and HGSS.
It also seems like the hate for Gen 5 never ends. In the past, it was hated because it was new and different. Now, it has been getting more loved and appreciated as of late, and that seems to have made the haters more vocal again. Feels like you can never see anything positive being said about Gen 5 without also seeing something negative to go along with it. That makes me sad to see, but I have also more or less gotten used to it at this point, which is also said.
Every generation after gen 2 seems to get a lot of nostalgia-blind hatred from former Pokémon fans, mostly directed towards the new Pokémon, but sometimes also for things related to gameplay and mechanics. I find the latter to be a more valid reason for disliking a new generation, even if I still disagree with it a lot of the time (but it depends on exactly what and which generation it is about).
This was notable in the past, and it still is nowadays. If you go to social medias or general gaming sites and look for a discussion about Pokémon, it will very likely feature former Pokémon fans who hate the newer generations. I’m not sure if it was worse in the past but it still exists nowadays at least. One recent situation I remember was when I saw someone make a discussion thread for Sword/Shield on a general gaming site I used to go to. The very first reply in that thread was from a former Pokémon fan who spewed nostalgia-blind hatred for all new Pokémon. I found it really annoying to see that happening, and that’s one of the many reasons as for why I left that site. I am very happy to see that something like this almost never happens on actual Pokémon sites like here on Smogon, there are very few former Pokémon fans here, there are way more current Pokémon fans instead. I think that is great and that is one reason I stick with these forums.
So I guess that's one possible reason. But there's more. Personally, I find gen 1 to be obsolete and outdated. I tried to replay Red one last time in 2006 and I couldn’t finish the main game, I found it outdated already back then. I had much more fun playing Emerald which was a more modern and better game. I did replay LeafGreen the next year though, and I had much more fun with it, I could finish the main game with ease. Overall, I find R/B/Y to be obsolete because of FR/LG.
I also feel that gen 1 gets so much attention for various things that I don’t think it deserves, which the other generations rarely gets. Some examples are the story and the characters, the Pokémon designs, the graphics and sprites, the music, the Kanto region, Yellow being a good third version or “the only true” third version, and maybe more things. Some examples I have seen here on the forums are posts where people praise an individual Pokémon or character, and it is usually from Gen 1, it rarely happens for any other generation. Now there's nothing wrong with liking or praising things from Gen 1, but I find it annoying because it seems to happen so much for gen 1 and so little for every other generation. I also happen to disagree or not care much for those things that gen 1 gets praise for.
I have never understood why people like the story and the characters from gen 1 so much, I find them to be rather bland an uninteresting on the whole. I find them to be too uninteresting and badly executed on the whole. Especially Blue who I find extremely overrated. I think he is a terrible rival, he is just a jerk with uninteresting characteristics and minimal character development. He is my least favorite rival in the series and the only one who didn’t really get improved in FR/LG, sadly. Overall, if we just go by the gen 1 games and ignore remakes and other media like anime/manga, the story and characters are incredibly flat and boring. The only interesting character IMO is Giovanni, and even so he isn't that great. Things do get better if we include other media such as the anime or notably Pokémon adventures, as well as the remakes. But still, it is far from the best in the series if you ask me.
I also think gen 1 has the worst Pokémon designs on the whole. Yes, there are many good ones but also many that are bland and forgettable which I don’t care much for. If I were in charge of dexit and which Pokemon would not appear in a game, gen 1 would be the first one I’d go to and definitely the one I’d remove the most Pokémon from. It also seems like the Pokémon from gen 1 are immune to all forms of criticism, you never see them get anything close to the extreme hate that the ones from the newer generations gets, and it seems like everyone is okay with the new Pokémon being hated on. And no matter which Kanto game you play, you are only going to see Kanto Pokémon during the main game. I am personally rather tired of the Gen 1 Pokémon for several reasons: I have been a Pokémon fan for so long and they have existed for the longest so I am just tired of seeing them, they have the worst designs on the whole, and I am tired of all the attention they get (more about that further below).
I think the sprites are not that good on the whole, they look especially bad compared to the ones in gen 2 which were on the same system while were much better on the whole. I don’t think they are anything special from a stylished or surreal artstyle either. As for the music, I guess it is fine, Gen 1 has many good soundtracks. But why should it be the only one that gets praise for the music when there are many other good examples in other generations as well? Regarding the Kanto region, I don’t think it is as great as people give it credit for. Yes it is a bit more open than most other regions apart from Johto, but it doesn’t feel like this openness accomplishes anything. It would benefit from being more linear and less open if you ask me. I prefer linear Pokémon regions. And Game Freak has shown that they have absolutely no idea how to make a more open game and do it right.
Regarding Yellow, I have never liked it as much as R/B, it is my second least favorite Pokémon game on the whole. It didn’t do as many improvements over the first pairs as Crystal, Emerald, Platinum or US/UM did. In fact, I find it to be worse than R/B. The whole concept of fusing the games with the anime never worked for me, and I wasn’t super fond of being forced to start with a Pikachu I can’t even evolve.
There’s also the glitches and buggy mechanics which R/B/Y and gen 1 are (in)famous for. I have never cared much for them either, I have always found them overrated and not worthy of any hype. Playing a game because of the glitches feels like a bad reason to me, and I’m happy that the general mechanics was improved in the future generations.
I also think I might be too mild and forgiving towards Gen 1 myself at times. It is easy to give it a free pass for various things just because it was the first. But I’m not sure if that is the right thing to do. Just because it was the first and it started the series does not make it immune to criticism.
I guess those are my personal reasons as for why I don’t care or like Gen 1 that much. If we look on a broader perspective, as for why it is “overhated” in general, I think one big reason is that gen 1 receives so much attention and focus everywhere. Or simply fan pandering, if we are to be radically honest. Starting from Gen 6, the main series has been giving more and more attention to Gen 1. The only real exception being OR/AS which focused on Hoenn instead, which was a nice change of pace. But in X/Y, S/M, US/UM and even S/S to an extent, there was a lot of focus and references to Gen 1. The Isle of Armor continued this by bringing back a lot of old gen 1 Pokemon which had been dexited, more than what was brought back from any other generation. And of course there’s LGP/E which are the biggest of them all, giving full attention to gen 1 and nothing else (no, Meltan and Melmetal doesn’t count). Personally, I think Gen 7 was the worst here on the whole, Gen 6 was fine and Gen 8 mostly tolerable.
This also happens in side-games and other stuff. Like Pokemon Origins, Pokemon Go (when it was first released), minor side-animations and songs as well as merchandise. It is either gen 1 or sometimes the current gen, the focus is rarely given to any of the other old generations. There’s also unrelated media which gives attention to gen 1. Twitch Plays Pokemon, for instance. It had a huge focus on Gen 1, and then nobody cared anymore once they had beaten Red and moved on to the next game. And this never seems to end either, Gen 1 continues to get most of the focus throughout all generations, making many fans, me included, tired of seeing it get so much attention that the other generations doesn’t get. There’s also the anime which I don’t watch but from what I have understood, it has given a bit of attention to Gen 1 in the later seasons too with the original theme song getting a remix in X/Y, and Brock and Misty coming back in S/M. The newer movies seem to have been more aiming for a “reboot” as well, but it doesn’t seem like they focus that much on gen 1 to me (I haven’t seen them, so I can’t really say).
As for the competitive scene… I’m not a competitive player myself so I can’t really speak about it, but from what I have seen, gen 1 seems to be a lot more luck-based compared to the newer generations. Someone once described it as a glorified haxfest which sounds very reasonable to me. It feels like it goes against one of the main aspects of competitive battling as battles are determined mostly by luck rather than skill. And Ubers only seem to be about whoever plays their Mewtwo better. But I could be wrong here because as said, I have no actual experience with the Gen 1 metagame.
I’m not sure if that answered your question, but that’s how I feel, so I hope that has given you some food for thought at least. I’m sorry of this comes off as sour and negative, but that’s just how I feel. To summarize, gen 1 might seem "overhated" because of all the undeserved praise it gets and the attention it gets in many different ways. Personally, I think I think gen 1 is overrated rather than overhated, being the first and the original does not make it immune to criticism. And this gave me yet another opportunity to say some things I have wanted to say for a long time (Smogon seems to be good at that), so I want to think you for that.
And while we’re at it, I have three new unpopular opinions of my own, decided to include them here as well. They are completely unrelated to any of the above about Gen 1.
Firstly, I liked the following Pokémon feature better in the Isle of Armor than in HG/SS. While I think both of them have a terrible execution for the feature, the IOA wins because of one reason: it is optional there, which means I could turn it off and didn’t have to use it. So that was great, and it honestly made me very happy once I found out that I could turn it off. That said, I could see myself using following Pokémon feature in a future game, but as long as Game Freak insists on giving it a terrible execution, I’d rather not use it or not see it coming back at all.
Second, unsure if this is unpopular, but I don’t really like the TR system in S/S. I really loved how they gave TMs infinite uses in starting from gen 5 and while I’m glad they kept it for Gen 8, the TRs feel like a step backwards as they are one-time only. This could have been okay if there was some really good way to re-obtain more of them as many times as you want, but there isn’t really one. There are several ways to get more, but none are optimal. You can get them from the Watt traders in the wild area but that requires you to know which trader sells which TR and at which day. You can also get them from raids but that requires you to know which raid Pokémon gives which TR, then you actually have to find/create a raid with said Pokémon, as well as do the raid battle and actually win it in order to get the TR. The Isle of Armor gives two new options, the first one being that you can find various TRs as items in the overworld. That’s cool, but those are specific TRs only and they can still only be used once. You can also create any TR through the Cram-o-matic but that requires you to know the exact recipe to get a specific TR, and you can’t re-do it if you do something wrong since the game forces you to save before, meaning you can lose useful items if you screw up. So I’m not super fond of the TR system on the whole. It got a little better in the IOA, but I think there's room for further improvement.
Third and last, I think this is unpopular because I don’t think anyone will agree with me here. I think that Gen 4 and 7 are similar or almost the same when it comes to the structure of the games that were featured in those generations. Both of them start with a first pair (D/P and S/M) which have some notable flaws but are still very fun to play and bring new things to the series on the whole. However, their flaws get more notable the more you play them, and when they are compared to other games. Next up, we have a follow-up to the first pairs (Platinum and US/UM) which does a lot of improvements and fixes several issues with the first pairs, improving on them in many important aspects. However, this also comes at the cost of the first pairs becoming obsolete, there is zero reason to return to D/P or S/M when you can play the better versions in form of Platinum and US/UM instead. Both of these follow-ups are also good games but not quite the games in the series (though I'd say Platinum was the best Pokémon game at its time, which I can't say for US/UM). Finally, both generations end with a remake (HG/SS and LGP/E). Those remakes had potential to be good, but they blew it all on bad gameplay and poorly executed features, they are filled to the brim with issues and feel like a step down from the original games or the previous remakes to the point that they are both among the worst games in the series. As a disclaimer I haven’t actually played LGP/E but based on what I know about them I don’t think I would like them all that much if I played them, they feel like a step down to FR/LG since they didn’t even include a lot of the things that made FR/LG so great to begin with. So yeah, I think Gen 4 and 7 are very similar when it comes to this.