Honestly? Naruto was never anything spectacular in terms of plot and characters. Even back in Part 1 although, not to the same extent as Part 2. Naruto has always been a generic mainstream shonen manga. It's decent in Part 1, but nothing groundbreaking, although it slowly went downhill after the Chunin Exams arc. There's nothing in Naruto that isn't better executed in other manga series. Part 1 was only good because his first editor, Kosuke Yahagi, basically dictated the plot and thematics.
As to why Naruto fails plot-wisely, it's a pretty long-winded post, but I'll try my best to formulate myself:
Naruto lacks a grand struggle that give characters a purpose: In Attack on Titan, there's an imminent threat to humanity. In One Piece, there's a corrupt government to overthrow, people to be liberated. These grand struggles affect everyone, it makes it easier to include an ensemble cast into the overall plot, and the eventual triumph would be a meaningful closure for everyone, not just the protagonist alone.
Now, look at Naruto, where're the struggles? Seeking recognition is Naruto's personal goal. Apprehending Sasuke is Naruto's personal pursuit, it's none of anyone else's concern. Only when Konoha was assaulted, then the Konoha characters have a common purpose. That's why Kishimoto had troubles writing the Konoha 11 characters into the story, there's no persistent threat and evil that can catch all the characters' attention in the plot. Of course, not every series needs to be an epic about changing the world like Legend of the Galactic Heroes. Dragon Ball and Hunter x Hunter doesn't have a linear plot, they're composed of sagas. But the thing is, Naruto pretends to be an epic about war and peace, and it tries to pass off its asspull-esque mastermind food chain as a "linear plot". In reality, it's just a series composed of disjointed story arcs involving small groups of villains, short-term threats, and shallow personal pursuits.
Naruto's climax is disconnected with the build-up: For the majority of the series, the villains' backstories shed lights on the problems in the shinobi system, which made Naruto vow on his life to bring peace to the ninja world. These all felt like a build-up to a climax where the protagonist and other ninjas would confront a villain that is the manifestation of what's with the shinobi system and the protagonist would offer an answer, and the ninjas would come to realization that they need to change. But **** no, we got Kaguya who got nothing to do with the system whose objectives didn't make an iota sense.
The premise of the story is shallow and limiting in nature: The protagonist's goal is to get people to acknowledge him and become Hokage. To make this occur, Kishimoto did two things which would make up most of the plot in Naruto, and they're both restricting to plot development, character development and world building. First of all, putting Konoha in perils, so that Naruto could play the savior to the damsel in distress that was Konoha. Two of the biggest arcs are about Konoha being under attack, the Chunin Exams and Pain arc. There's another attack that didn't materialize: Sasuke.
Honestly? These save Konoha arcs got old pretty quick, and once Naruto got acknowledged in Pain arc, there's no room to expand the story. Also, since Naruto only wanted the citizens of Konoha to acknowledge him and become Hokage, there's little to no point in creating arcs that take the protagonist outside Konoha or give him a challenge that wouldn't earn him recognition. This very much limited possibilities in plot ideas.
If you look at One Piece and Hunter x Hunter, both of their retrospective protagonist's goals are searching for something or someone. This setup allows much more options for plot concepts, take One Piece for example, every island in midst of a journey is a different world, with different issues, with a whole new cast of characters that would interact with the Straw Hat Pirates. In Naruto's case, we just kept seeing Konoha characters keeping Konoha at bay, and exclaim some corny lines about protecting their homeland.
Second, making Sasuke leave Konoha, so that Naruto could chase him for acknowledgement. This is what Naruto did for the majority of the series, but it’s a personal pursuit that only matters to Naruto himself, not the ninja world on a grand scale.
