To respond to the title of your post, no the story is not bad at all. I find the story to be actually very engaging. I love the lore and role play aspect they have created.
I have a few critiques on the writing, but I am a lore/story junkie. So my limitless expectations should be taken with a grain of salt. What they have done with this game is phenomenal and a vast improvement lore-wise from DOS1.
Play it for the companions and their stories, not for the main game story is what I will recommend.
I agree with this. I have spoiled myself with lore enough to know the endings to DOS2. I am currently in Act 2.
The games Larian produces are amazing, I feel bad complaining about any aspect of them. The only thing I can comfortably critique is the lack of closure for the player at the end of their journey.
But I digress, these minor things can hopefully be reworked in patches, enhanced editions or mods, no?