I mean Regenerator is what makes Ho-oh not terrible, it spent 2 Generations being wholly unable to switch out if Stealth Rocks are on the field, sure Lugia takes extra damage too but it is a little bit more bulky than Ho-oh is.
Also there is the fact that Moltres is also Fire/Flying so..Ho-oh is just sort of "Moltres' big brother" except with (when Silver came out) worse stats because Sacred Flame was a special attack..and Moltres has a slightly higher special attack than Ho-oh, and hey as much as you think Lugia being a mascot is strange at least Lugia is a good pokemon. Lucario is probably the dumbest "pushed mascot" they had, If only because he got cucked by Heracross of all things.
TDLR : Pokemon has always been completely fucked up and always will be. That is part of the reason I think the REEEEing about how "Bad" sword and shield was around here is hilarious. Every generation has had something completely fucked about it.
I guess if you look at it from a purely mechanical perspective yes, Ho-oh is a terribly designed mon kit-wise, but I maintain that Pokémon was never really meant to continue “competitively” past Gen 2, especially after Tajiri “retiring” upstairs to executive and the main development team scrambling to cobble together what remained of the formula to crank out something profitable.
Normally, I wouldn't have any problem with this line of logic, but for the sake of argument, Game Freak really fucked up by introducing the physical/special split in the first place.
A lot of these robust changes to the more intricate systems are more or less the responsibility of the battle programmer, who for the longest time has been Morimoto, I think. Egg move additions, TM indexing, changes in game mechanics, etc. All of those are his responsibility, and quite frankly it's in my personal opinion that he's been the heart of the machine cranking out QoL after QoL addition in each iterative entry.
You also have to remember though that Tajiri originally envisioned Pokémon as a one-and-done entry in a similar style to Dragon Quest, and Gold and Silver only happened due to unforseen demand, as well as their new media franchise blowing up. Especially considering just how unorganized GS was early in development and how much it changed after the Spaceworld '97 build alone thanks to just high ambitions all around, they barely made release date and were forced to scale down the scope of Gen 2 to accommodate.
Game Freak has at this point more than 20+ years of experience developing this series; Morimoto's pouring in double-time as the mechanics programmer, but it's on the conceptual and creative team (i.e. Masuda and co.) to actually draft up the roster for each entry. Now that Sword and Shield have been long past their honeymoon period, and especially being a Switch game, I think it's perfectly justified for people to voice their complaints about the game since with hindsight it's more obvious than ever that SwSh was
planned to be a mediocre entry instead of an engaging one. Even Masuda himself has voiced distaste for continuing the series, going on record that the studio treats Pokémon more like a contractual obligation rather than a fun game; I assume the planning team comes up with the creative ideas and pitches them raw without much filtering these days considering all the guest artists drafted to work on the series; that's probably their idea of the most "fun" they can get out of developing what's now become a chore.
My problem with what you said lies not with that "it's fucked regardless" since that's pretty much subjective as is, but rather that "it's fucked because it's obvious now that the franchise literally does not have any clear direction apart from rehashing the formula and only iterates enough to constitute a new installment." A casual observer like me couldn't give two shits about programming nuances and bugs as long as it's not a regular occurrence or a complete detriment to the overall experience. The same can't be said about just a frustratingly obvious lack of cohesive creative direction and growingly-obvious symptoms of poor long-term planning (Bank, Home, GO as a service, DLC models, cut content, removal of QoL that could've been persistent).
We've looped completely around from GO being a mindless spinoff that wasn't supposed to last long past the initial 151 to a game that has the potential to outlast whole generations and has better longevity than the actual main games that are supposed to draw in the numbers by sheer virtue of drip-feeding content in an F2P game.
I don't think the prospect of eternally condemning your cashcow franchise to a heavily dumbed-down games-as-a-service mobile game is appealing to anyone, and anyone remotely paying attention to the community shitshow that happened during LGPE would've picked up on it too.