I think the problem, in general at least, is simply that there is a disconnect between perception and reality.
Most of the people who say they liked the first Mass Effect but hated the second will justify this position by saying some variation of "Bioware dumbed down the game". From a pure mechanical standpoint, the actual act of playing the game has actually gotten more complex. Players are rewarded for shot placement, dialogue now features optional QTEs, and the value of having a particular skill at a particular time (and using it correctly) is vastly increased. From this we can draw an important point: what people think was undermined was not the mechanical systems of play but rather the customization elements of the RPG.
Here is where we see the disconnect. People decry the game's massively reduced skill set, level cap, granularity of skills and inventory system not because those systems are inherently good or fun but rather because they allow players to make additional decisions about their game. The problem, one will find, is simply that the original systems did not offer any real improvement in choice, or any meaningful depth to the customization of a character.
For the vast majority of people who play RPGs, the systems that define character customization do not serve to define the character but are rather approached as a system to be exploited in order to make a given character as powerful as possible. People do not often play Morrowind, for example, without choosing as a major or minor skill any direct or indirect combat ability because the game favors combat as a mechanism for dispute resolution and as a significant source of experience gain. Mass Effect is much the same in that regardless of what you think of Shepard as a character your primary role in the game is to facilitate the murder of tons of dudes.
With this in mind, consider the inventory system in Mass Effect. The quality of gear you could find or purchase was directly related to your character's level. At any given moment there was an optimal armor choice available. The same was true of weapons. Thus the inventory system served no other purpose than making it more difficult to reach this optimal level of combat efficiency by forcing players to spend an inordinate amount of time comparing marginally different stats of dozens of roughly similar items. Even when a weapon or piece of armor was found to be a clear improvement upon the equivalent item currently in use by players the difference was so marginal as to have no real effect. A few percent increase in a weapon's damage did not reduce the number of shots it took to fell an opponent and the marginal increase in protection served little purpose beyond keeping pace with the ever improving enemy arsenal. By contrast, in Mass Effect 2, rather than having a selection of more or less equivalent items to sort through the player is simply given a small selection of items that are different. These generally equated to weapons that maximized burst damage (best damage done in a brief window), such as the heavy sniper rifle or pistol, or weapons that maximized sustained damage (the lighter pistol or the heavy assault rifle). In the three primary weapons, we find that the third tier of weapon replicates the function of the first tier of weapon but is generally better for specific purposes. This more or less ensures that players are easily able to choose the optimal set of weapons for their team with a minimum of effort as the choices between weapons is between a few distinct items rather than an assortment of nearly identical items. This same logic holds for the armor customization for the player.
The same story repeats itself with the skill system. While the skill system in Mass Effect was incredibly granular, any particular investment of a point offered an inconsequential improvement (unless that point happened to coincide with one of the skill unlocks). This means that, only after the investment of many points was there a distinct improvement in capability in any area. What this effectively means is that, in spite of the granularity of the system, an investment is only meaningful if it manages to unlock a major skill and thus rather than having hundreds of choices to make the player was effectively only making a relative handful. By contrast, in Mass Effect 2 the player is asked to make fewer choices in this regard but any time they invested points the difference made was significant.
In effect, what was lost in transition was not depth or choice but rather meaningless granularity that offered no significant change in how the game played, or the player's combat effectiveness. There is a perception of loss because you are asked to make fewer decisions, but those decisions the player makes actually have a significant impact on the game.
