"Story" is a broad topic that includes characters in my book though, and for me ME2 does characters much better than ME1 did. I also find the plot arcs of places like Noveria and Feros to be a boring slog to get through. But I will agree that the "main" arc of ME1 is more intricate and interesting than ME2's Collector arc.
it's all preference. I guess it's the way I view them. Imo, ME1 is the campy sci-fi tv show, ME2 is the badass action movie, and ME3 was the war epic. I like all of them, but at any given time I prefer ME1s type of journey/experience.
Setting-wise, I loved Feros and Noveria. The ME1 Citadel is still my favorite hub. Those diverse settings along with the uncharted worlds we'd land on with the Mako, they added a sense of wonder and immersion that I haven't experienced in the series since. Most people around here love Omega in ME2. I flat out hate it. The hubs as well as the segmented mission design ruined my sense of wonder. The Citadel was the worst in ME2. Couldn't get enough of Illium though. I wish it could've been bigger. ME1 felt like an open RPG where we seamlessly come and go as we please. The sequels felt like mission-based shooters with some RPG elements. Bioware built its rep on making story-driven RPGs, not mission-based shooters.
(idc when the next game is set, but we damn sure better get some leisure time on each Council Homeworld. Not 1 measly mission)
Character-wise, while there wasn't a great deal of dialogue content, I found ME1's characters much more believable than ME2's. They seemed more grounded in reality, all with their own very different backgrounds. With ME2, I felt like I was recruiting 'Space X-Men: First Class" lol. Multiple people had ridiculously similar backgrounds, problems and/or motivations (mommy/daddy issues). Also, I felt the amount of characters contributed to each ones lack of diversity. Had there been less squadmates, the ones we had could've been more ambitious.
Narrative-wise, I always have more invested in the big picture. The characters can be great, but if the plot is pointless and without direction, then I'm going to be disappointed. This is probably why I prefer ME3 over ME2. The focus returns to the overarching Reaper Narrative and the ME1 characters I fell in love with.
Viewing ME2 as a standalone side-story, it's one of the best games I've ever played. Taking it for what it is, the middle installment of an epic space opera trilogy, and I'm thoroughly disappointed.