Effect Games has a Q & A with Mark J.Ferrari wherein he actually mentions the game!
From what he says, the developers seemed not to have enough time to finish the game properly. That explains some of the bugs and the imbalance between the player and the AI. But I don't think that those minor issues explain all the aggressions towards it.
It was original in it's attempt to merge text adventure like dialogues with real time strategy. Ok, it was definitely a bad decision to step back from the Magic formula with turn based battles and to make it real time strategy - the AI was also not too impressive - but that doesn't justify all the negative blah about it. They had memorable characters and an high replay value since you could start out with 6 different planswalkers who started all from their home region. Some characters where easy to play since the surrounding regions where easy to conquer via dialogues. Other had a difficult start surrounded by strong AI players or regions with scant mana. That's something you don't get in every strategical: Some kind of characterization of the played hero by the environment he lives in. For example you played the forest-elf-witch who lives in a lush green environment with lots of mana - it felt like a thrieving starting point with lots of opportunities. Or you started out as some kind of cthulu-like ocean-wizard living at the coast surrounded by regions with large plains - white mana that did not fit to your deck. Playing this character meant to fight your way south to the swamp regions with a tiny deck, sparse black/blue mana and a strong AI opponent in your neighborhood who benefited from the plains - it felt harsh. You actually played the spellcaster you had chosen. It is a very interesting concept to confront the player with the problems which come with the chosen deck/character. Also they embedded it in an interactive story by giving you the opportunity to talk with the locals and solve their problems in long, more book-like dialogues. A lot of efforts went in crafting the dialogues to achieve a real characterization - a design decision that doesn't seem to be too popular nowadays...
That is a point i find very interesting. Most games feature a standard cast with boring characters: "Here you have an elf/orc/wizard/insert-your-cliche-here, you know what to expect from it because you have played it 100 times before this particular game and you will play it again because we/no one tries something new." It feels more like filling out a form instead of playing a game. So on Magic the Gathering Battlemage they tried something new - and everyone freaked out. There is still no walkthrough for the story mode on youtube - on youtube you find walkthroughs for almost everything from the 90s! Somebody started gameplay vids but quitted after part 1. On this single video aren't too many comments - only a few people seemed to like it. The (lousy and in no way representative) intro is on youtube - mixed comments on the game here: Some are still full of hatred (9 years after release!) but at least some like it. Thats new! A couple of years ago everyone commented derogative. People seemed to be disappointed by something they expected from a Magic the Gathering game and started bullying it. The crowd followed the haters. Hive mind mentality. Damage Done: I could imagine that after this experience a lot of developers stepped back from novel ideas and started to play it safe. Fantasy role playing entered a dead circle.