Personally, I liked Varric. I dislike most of the dwarf characters with their arrogant, bearded, drunkards with a killer combat mentality, kind of 'cookie cutter' writing where the author really doesn't give much thought to developing them. Varric was the first dwarf I saw ANYWHERE who broke the mold and went to new territory. No beard, fancy clothing and he was diplomatic/charming instead of gruff and blunt. I went EVERYwhere in Kirkwall with him, he was my favorite companion. Not to mention you can avoid a few fights if you have him along, thanks to his witty tongue.
DA2 did seem a bit over the top, but I'm sure as with any story, there are elements of truth behind them. Perhaps DA3 will bring some of this to light.
He's the only character who can tie Hawke into the tale, though how he will do so for the warden is less evident. Leliana (and if he's alive Anders) both have ties to both characters. And Alistair, if he isn't king. If he's king, he's too busy doing other things. Too many variables to be including them.
I wish, though I like him, he wasn't going to be a companion in DA3. I was hoping for all new people, as I've been unhappy with every 'returning favorite' Bioware has presented us. Is that confirmed? Or are people assuming because he's in the trailer?
As for the original post, while I liked Morrigan, I went from barely able to tolerate to Sten to outright loathing. Since most of my playthroughs were as a female Surana, his views on women and mages were very offputting.