It's not horrible. I still enjoy playing it. But the combat is pretty basic, the puzzles suck, the camera is wonky and so is the jump which make certain platforming sections less than great. The gummi missions are nostalgic for me, but looking back there's no way to defend them. I'm way into that story, but I know a lot of people aren't. And honestly, if someone has no interest in the story of Kingdom Hearts, I think they should skip 1 (and Chain of Memories) and go straight to 2.
But the game also has a ton going for it. The art is gorgeous, the music is gorgeous, the characters are endearing, the worlds are varied, and the simple combat is mitigated by surprisingly diverse and well-designed enemy AI patterns and boss fights.
It was Tetsuya Nomura's first time directing a game and it shows for better and for worse. There's a lot of things they tried that didn't work, but there's also a lot of things that did work that no other games were doing at the time. It was bold and original, and it clearly came from a place of passion. But it's still kinda "bad".