It's not hard to see why KOTOR 1 is remembered more fondly. In mechanics and setting it was an original piece of video game and Star Wars universe content, while retaining much of the flavour and themes established in the movies, particularly the light hearted good-vs-evil hero's journey. For better or worse it's a safe adventure, but a very well rounded and well produced one, with complete game content and story arc.
KOTOR 2 was building off its predecessor, so it loses points for originality, and was obviously unfinished and particularly buggy. So even if it's more preferable to some (myself included), I can appreciate why fans more fondly remember where the series began, especially at its most well rounded, iconic, and presentable iteration.
But yeah, KOTOR 2...hell of a game. Really accentuates the strength of Obsidian's writing, particularly in constructing morally ambiguous characters that have strongly defined personalities and histories that exist beyond your player avatar, and are interwoven with your chosen arc with suitable and often confrontational conversations.
I mean, KOTOR 1 and KOTOR 2 really personify the massive differences in the way both BioWare and developers like Obsidian make their "role playing games", particularly their narratives. BioWare has always (and continues to be) more comfortable creating protagonists with a Jesus complex, and the supporting cast tends to supplement and revolve around your chosen path. Obsidian on the other hand tend to write characters and scenarios that challenge the path you've chosen, questioning your decisions and interpretation of the narrative, the supporting cast challenging your perspective.
