As with most movies, stories and other games, everyone has a different opinion on whether it is great, terrible or everything in between. It is all subjective and a matter of tastes.
In fact, the man himself Jay Wilson answered a fan question about the "terrible story and dialogue" in Diablo:
About the dialogue and story. You brought in some nice talent to do the voices for the game (some examples being Jennifer Hale as Leah, Steve Blum as Zoltun Kulle, and my favorite, Claudia Black as Cydaea). However some of the lines of dialogue in the game just made me cringe. I mean Belial isn’t a great liar, Azmodan is constantly telling me what he’s doing, and “I AM THE PRIME EVILLLLL!” I know at Blizzard, gameplay always comes first which is great and I think you did a fantastic job, but that doesn’t mean story isn’t important; So uhh… no offense intended, but really, what happened? Did your QA team not say anything or what?
Agree to disagree? We get lots of compliments on the story and dialogue. It's a hard area to make everyone happy, and a lot of things we do to make goals obvious for some players make them feel over-stated to others. We never tried to make War and Peace, just a decent pulpy story about heroes fighting demons.
I personally couldn't agree more with the person asking the question.
Though the response is also very valid, as it is a matter of perspective. There are plenty of people who enjoyed the story out there.
But I must say - I am baffled that there wasn't at least major resistance and push-back internally at Blizzard about the dialogue and really childish / lame monologues present in all the acts.
During my first playthrough, I had numerous "lolwtf" moments. Not about exciting twists and turns in the story, but rather more..... Seriously Did Diablo just childishly mock Tyrael in the same way that my 5 year old cousin would mock his little sister? "LOOK TYRAEL LMAO UR OLD LEUTIENANT HAHALOL NUB ITS IZUAL ROFL U GOT PWNED".
Did Zolton Khul just say "JUST ABOUT. YES A LITTLE LONGER. KEEP GOING. YES. JUST ABOUT. NEARLY. YES. YESSS! JUST A MOMENT." About 6 times too many?
Did Belial actually think he was a good liar or fooling anyone? For the lord of lies he sure is really bad at it. In fact, it was so obvious who he was that I actually thought the twist would be that he would NOT be the emperor.
Did Tyrael just say in the most cheesy, ridiculously lame voice "I....AM...................... TYRRRRRRRAELLLLLL ROAR."
Will Magda shut the hell up and stop telling me that I'll never find the next sword pieces, when I in fact found it with ease every time?
Will Leah stop getting captured and then exploding madly in a violent burst?
Will Azmodan stop repeating "YOU WILL NEVER KILL THIS GUY. OK YOU KILLED THAT GUY. BUT YOU WILL NEVER KILL THIS OTHER GUY. YOU KILLED THAT OTHER GUY. BUT YOU WILL NEVER DESTROY THE SIN HEART. OK YOU DESTROYED THE SIN HEART. BUT YOU YOU WILL NEVER DEFEAT ME. *dies*.
Than only moments later: Diablo: "YOU WILL NEVER DESTROY THE FIRST HELL RIFT. OK YOU DESTROYED THE FIRST HELL RIFT. BUT YOU WILL NEVER DESTROY THE SECOND HELL RIFT. OK YOU DESTROYED THE HELL RIFT. BUT YOU WILL NEVER DEFEAT.... etc etc.
And than Diablo proceeds to tell me that I will never defeat my own TERREURROOORRR in a very nagging, transgender voice. Not once, not twice, but probably over a dozen times during the encounter.
Like in a typical kids movie where the bad guy sounds like a snake and makes sssssssssss noises.
YOU WILL NEVER DEFEAT YOUR OWN TERRRRRORRREURRRRR. Ok you defeated your own terreuror. BUT WHAT ABOUT MY TERRRUERORRR?!?!?! ROARRRR.
Isn't the whole idea with horror themes that you are supposed to feel fear of the unknown? Why does this benevolent and mighty lord of Hell talk like a 14 year old boy fighting and baiting people in The Barrens chat?
If they just made him shut the f*** up, Act 4 would've felt a lot more mysterious and seedy. That alone would've drastically improved the atmosphere, let alone actually putting cooler dialogue in there.
You'd think destroying the world and heavens would keep you too busy to childishly poke your tongue out at some random guy and try and bait him by telling him hes fat,ugly and stupid, let everyone down and will never succeed in life.
Thank god the gameplay is the main thing that matters.