Many reasons to say that:

• beautiful art
• great graphics
• nice plotting with enough elements to really absorb you in the quest
• world with it own personality
• our beloved Gerald
• well done / not flat characters

It is true that tw3 is a better game, but if you are really apassionated about it the definitely tw2 will also fill your (already high) expectations.

Nad it is underrated because many people only knows and only explored tw3 without giving any opportunity to previous releases. To the point that a lot of the fan base was created when this game became available for free download in some game platform.