I agree with you, the nostalgia around them make them better but other than the 2 legendaries there's nothing great about those games, maybe Cyndaquil but that's it.
Edit: And Heracross, I love Heracross.
Yeah, looking back at the Pokemon released in Gen 2 there really aren't that many that would be close to making my list of favourites.
Tyranitar is one of my all-time favourites, along with Lugia and while Ho-Oh isn't really a favourite of mine but it's very iconic and one of the stand-out Pokemon. Heracross and Scizor are excellent and definitely some of the best Bug-type designs ever. My only other favourite from Gen 2 is Quagsire for some reason. The rest I could really take of leave and wouldn't mind if they are mostly culled from Sword/Shield. The starters weren't terrible in terms of design, but compared with the others I think they are definitely below average and in terms of usability in battles, they are quite awful. I'll mention Espeon and Umbreon as well though, while I'm not particularly a fan of Eevee and its evolutions, they are probably the best two. But yeah, looking at the rest of the Pokemon, there's a lot to be desired and when you really evaluate it, it's hard to argue the designs have declined throughout the series when you see most of Johto's offerings.
Gen 2 did give some great things to the franchise such as breeding, but I think that was something that would have eventually found its way into the games anyway. The big problem was the insistence on Baby Pokemon though. I get that at the time it made sense to have some new additions to evolution lines and more reason behind breeding, but in the grand scheme of things Baby Pokemon bring nothing to the games. They are just a way to add numbers to the Pokedex whilst being able to add a Pokemon based off another's design (arguably an excuse to be less creative). I guess this is evidenced by Baby Pokemon basically being ignored since the Gen 5 reboot that they are one of the things Gen 2 gave us which are pointless.
I think being able to visit Kanto again is the only argument I hear for why Gen 2 is the pinnacle of the series for most fans, but when you consider there was very little point to it, it's hard for me to take that argument on board. Collecting the 16 Badges basically allowed you to go and face Red which is of course cool, but I think it's not enough of a reason to be collecting 16 Badges. I much preferred Emeralds Battle Frontier as post-game content as it remains the most challenging thing ever in a Pokemon game. IMO this is why Emerald and Platinum are the absolute peak of Pokemon games and I hope this new gen starting with Sword/Shield can go in that direction again.
Also, I think with Gen 3 adding 135 new monsters, Gen 4 with 107 (along with evolutions of older Pokemon making most of them cooler and more viable) and Gen 5 adding a further 151 entirely, they all brought better designs and more monsters worth collecting than Gen 2 did. They also added better mechanics and QoL features for my money, especially double battles which became the best way to fight IMO (Pokemon Company agreeing as it's what they use for official tournaments).
All that said, I don't dislike Gen 2 at all. Game Freak hasn't made a bad main series Pokemon game, but there is quite a distance between something I'd give an 8.5 like Gold/Silver and a 10 like Emerald.
