I recently replayed FF7, and I actually stopped before the end of the first disc. I have to say, that the materia system wasn't all that bad; it was a pretty good idea for its time, I suppose. The main problem lied within the storyline, where it just seemed bland and forced, especially with elements concerning Sephiroth.
Right from the beginning, you know Sephiroth is going to be THE villain of the game. That's not too bad, I guess, but they throw his name into almost every conversation with every character you have, like they know he's just tacked on, and if they mention his name more, and a little more about him, then the player will just accept it. But it's ridiculous! Like this:
President: Who are you?
Cloud: You don't remember me? I'm was in SOLDIER.
President: Ah, I see. Well, I can't be expected to remember everyone's name. That is, unless you were another Sephiroth, of course. Yes, THE Sephiroth. Ah.... he was good. Perhaps too good. He got really good, is the point I'm trying to make here. About Sephiroth. And then he decided to go emo and run around looking for his mommy. He wears a lot of mascara too. Sephiroth. .... Sephiroth.
Cloud: .... Uh, yeah, so my name's Cloud.
President: And some people think Sephiroth is still alive.
Cloud: .... o....k....
Well, anyway, a lot of other aspects of the story just felt tacked on too, like Aeris and Cloud being in love. And a lot of the characters just seemed to act irrationally and unrealistically. In replaying it again, I'd have to say the best character is Red XIII.