This kinda thread has been created many times, so it's a bit of a pain to have to repeat the same argument over and over.
But yes, it is very much overrated. As a story DBZ isn't all that great. The plot is very, very formulaic and repetitive, the characters aren't really developed, and the action, while fun and intense, isn't THAT much better than the kind of action you would see in any other action Shounen.
It's less that DBZ is bad and more that there are a number of series out there that are a good deal better. In terms of Shounens, Fullmetal Alchemist, Zatch Bell, and One Piece are all vastly superior to it. In terms of anime/manga overall, DBZ doesn't even come close to being one of the "Greatest stories." It's always the case that people who love DBZ the most are the ones who grew up with it. I myself watched it and loved it as a child, and at the time I thought it was the coolest thing ever. But if you look past the nostalgia and assess it on an objective basis, DBZ is a pretty average series and little more than that.
I personally would say that it isn't deserving of its popularity, but I can see WHY it's popular. It's simple, fun, and easy to get into. You don't NEED to follow 200+ episodes of story to understand it, if you've seen one DBZ episode you might as well have seen them all because most of it is the same stuff over and over. As a story that makes it weak, but for kids who come home to watch TV after a long day of school that need to unwind and watch something fun, DBZ would be the perfect thing for them.
But would I say it's one of the greatest anime of all time? Not in the least. It has a lot of influence, but that's because it has such simple, basic plot elements that it's easy for other stories to use them and to elaborate on them to make it better. DBZ is something that's easy to use elements from, but honestly it's just as easy to make a superior story. Even then, however, people say that all anime owe something to DBZ but they really don't. DBZ has a lot of influences but many stories have nothing to do with it. Code Geass, Clannad, Steins;Gate, Fate/Zero, all of those are vastly superior stories that don't share much of anything in common storywise.