Aside from the Lands of the Damned, I always saw Palladium Fantasy as pretty bland, too. I didn't play it as much as Sprig, though.
To answer the original question (what is the appeal of Rifts?), I'd have to say...I'm not sure. Obviously the setting appeals to a lot of people--some people (like Jeffe) see it as too scattered, while other people (like me) see it as wide open and adaptable to almost any style of play. The openness is one of the big problems, however, as I pointed out in my review--it's very easy to get bogged down in option overload.
As for some of Slant's concerns, I'm probably not the one to talk to because I've always felt that balance between characters is kind of silly--as long as the characters are working together rather than against each other, who cares if one of them is stronger? That's like complaining that The Fellowship of the Ring was lame because the hobbits had no real skills; as long as they had fun, though, and told a good story, it all works out in the end.
For me, personally, the appeal of Rifts is part setting (which I love) and part nostalgia (I played the game during my formative years as an RPGer, and I've always enjoyed it). It's possible to drown in ridiculous munchkinism, and I have, but eventually you grow as a gamer and realize that it's more fun to play maturely (though I use the term 'mature,' of course, very loosely).