Huh, now there's a game I haven't thought about in ages. I remember the combat being super good and the visuals, for the time, spectacular.
As for being the best horror game though.... ehhhh, I dunno. I do recall even when I first played the game that it fell into the often predictable trap of action/scary linear bit/action/scary linear bit/repeat. You'd shoot up a bunch of baddies then have to walk down a corridor and the lights would be all weird and GASP, you'd see a shadow or something, then there would be another bunch of guys to fight and so on till the game ended. That kinda ruined any sense of pacing or foreboding and made the game a bit too, well, gamey.
Also it never really stuck with me either. Really good horror, the genuinely horrifying stuff, tends to fester in the back of your mind making you wonder about it days if not weeks or years beyond when you first experienced it. In FEAR I remember there was some... umm... russian mind control guy? I think. And you shoot him in the head. And Alma, the scary girl, was actually like some weird test tube baby or something?
Yeah, it never really stuck with me. But then that's also a highly subjective thing in all fairness.