Bakshi's movie was seriously flawed in a dozen different ways: the abrupt ending, the strange characterizations of the Hobbits including presenting Sam as a doofus, Boromir as a "Viking", the lack of funds which meant that the rotoscope animation (or whatever it's called!) of the first hour of the movie was not too bad but went steadily downhill from there.
I vaguely remember when I first heard this movie was going to be made. Many fans had high hopes. The most encouraging thing was the man they chose to write the script: Peter S. Beagle. He was an accomplished fantasy writer and, in fact, wrote the intro to one of the editions of LotR. What came out was definitely not what we expected. The funniest thing was this: nowhere in the pre-film advertising did anyone mention that this film only covered half of the book. Everyone went to the movie premier thinking that they would be seeing the entire Lord of the Rings, and came out scratching their heads because Bakshi cut off the action after Helm's Deep. Of course, the film was not a box office success and Bakshi never made his sequel.
There were things in the movie I did like: Bakshi's portrayal of Galadriel (I honestly liked it better than PJ's!) and the quality of the animation for the first hour. But overall the movie did not do a good job. However, I would not say I "hated" it. "Disappointed" would be a more accurate term.
It's funny -- this film came out in 1978, and so did Tolkien's Letters about the same time. I remember reading the part in the Letters where Tolkien said he didn't think his book could ever be successfully adapted into a film. After seeing Bakshi, I started to wonder if JRRT was right!
As flawed as Bakshi's film was, it was stellar when compared with the made for TV adaption of the Return of the King. That was the movie I most disliked. This was a Rankin-Bass production. Rankin-Bass had also come out with a Hobbit movie for children. The Hobbit was, in my opinion, a decent movie and had touches of charm. Moreover, more than all the other Tolkien adaptations (including PJ), the Hobbit was very faithful to the storyline.
RotK turned out, however, to be exceedingly bad -- far worse than the Hobbit or Bakshi's film. They absolutely killed the story, sticking in all kinds of weird things and "dumbing down" the plot. There are a few lovely landscapes depicted in the film, but other than this it is really bad!
But let's just be glad for these earlier movies. Tolkien sold the movie rights to LotR only about a year after the book was finished. If he didn't do that, I highly doubt that Christopher Tolkien and the Estate would have been willing to see any movie made. That could have effectively squashed PJ's project. There's all kind of interesting stuff about the rights to these early movies -- the ones that got made as well as the ones that didn't. (The latter include the Beatles' adaptation, the first one by Ackerman that Tolkien discusses in his Letters, and the one by John Boorman.)
I would like to have seen Boorman do something with LotR. His movie Excalibur was definitely interesting, and gives us an idea how he would have approached LotR. I read somewhere that Boorman actually talked to JRRT, and Tolkien told him that he preferred to see his book made into a live action film, rather than an animated one. However, once Bakshi's adaptation came out, Boorman dropped the project.
For an interesting discussion of these early film adaptations, see this link:
here