Not all the CGI is bad. I think Gollum/Smeagol in the Hobbit was absolute perfection. Seriously, I had this lump in my throat when he was on screen from the work they did with his life filled eyes. The skin texture, the glossiness of his skin from being in the caves for so long, were superb. In fact, the effects for him were better than what they were in LOTR. Then there was Smaug, he looked just like how I imagined he would be, but better. He's one of the best film dragon/effects creatures I've seen and had real character. There are also some locations that are completely CG that looked fantastic, the mirkwood forest being the prime example. The spiders were well done and that little moment where Bilbo is above the tree line, taking a breath of fresh air felt real.
The things that I think are awful are all the other creatures and orcs. I agree with the criticisms. The orcs and goblins look awful in these movies compared to LOTR and the lack of practical effects have a lot to do with it. I've hated the look of Azog and Co. since day one. Things like Radghast's bunny sled, the shots of huge armies, and ninja floatin' Bombur are truly horrific in my eyes and reek of Jackson being too reliant on special effects. The absolute worst thing though is the glowing light effect going on these movies. Everything from locations to character are emitting this soft, glowing light like they're all ****ing elves! Why? Because 90% of what we're seeing is green and blue screen. Fake ****. In LOTR, this was used at a minimum, especially in the first two. The only things that really emitted this light were . . . the elves. It made sense. Arwen was retouched in post production, Galadriel, etc. Nobody is denying that those films had CGI visual effects done to them, but there was a better balance. Things started to look fake and artificial towards Return of the King, especially once you get to Minas Tirith, the Paths of the Dead and Pelennor fields, but not like this. I remember cringing when Legolas did his Oliphant stunt in Return of the King (which is fortunately saved by Gimli's "only counts as one" line) and a few shots of Aragorn's coronation, but the Hobbit movies have these multiplied by 10. The color grading and effects are way too saturated in the Hobbit movies and the locations and miniatures are far and few between. It's like Gandalf the White or Galadriel are emitting in every scene in the Hobbit movies to the point where it never feels real or gritty. The great thing about LOTR is it had a nice mix of practical and CGI work. We had huge miniatures, prosthetic monsters, huge sets, and a lot of on location shooting. Think of all the hand made work and hours that went into the Uruk armor, the chain mail, the moveable masks, the performances, that are nonexistent in the Hobbit that are simply made in a computer. The main CGI elements in LOTR were characters that couldn't be done for real (Balrog, Gollum, etc.) and "doubles" like the Fellowship crossing the bridge of Khazad Dum or 10,000 Uruk Hai at Helms Deep. You know what though? Those were integrated with real settings from models, matte paintings and other tricks. Hobbit is over relies on effects and abuse them, this is especially evident when you look at the making of/behind the scenes documentaries.
Aragorn said it best,
Viggo Mortensen Criticizes Peter Jackson, CGI and The Hobbit - IGN
Sometimes limitations are good things. It forces you to be more creative and stretch your boundaries. When you can make anything you want, things will start to look sterile and unnatural. That's where the Star Wars prequel comparisons come from.