The Legend of Korra as a whole is very much like the final two-part episode: it manages to be a good show in spite of sabotaging itself at the end. The story is very tight and focused, with few superfluous elements. The plot is dramatic and strong, with some good twists and turns along the way.
The weaknesses in the story structure mostly come from writing a story that's just too big for 12 episodes. This is a story that really needed just one or two more episodes (as well as reclaiming a throwaway one); it needed that extra time to properly tell the story it's trying to tell. They do use efficient storytelling techniques where they can to condense information as much as possible. But at the end of the day, there simply wasn't enough time to tell the story correctly. They get most of the way there, but not as far as they could with more time.
The worldbuilding is mostly top-notch, as expected. Despite the oddball technology like mechs and such, the world feels very real and genuine. It does feel like the future world of ATLA. There are clear signs of progress, not just in technology but in bending. And the Equalist conflict is a very natural divide, considering how important bending is to this Republic City and the world. The music is mostly quite good as well, really helping to sell this world and make it similar to what we know, while imbuing it with a real identity and feel.
The animation quality is similarly high. Cinematography and lighting are used competently, though I think there were a few too many uses of slow-motion, which never works in animation. They do their usual good job at letting characters have a variety of outfits and looks; Korra herself has numerous costumes, some only ever seen in one episode. Granted, they had less than half the run for a TV series these days, so one-offs and such aren't as big a problem.
This story is more plot-focused than ATLA, but there is still some character on display. Proper use of implicit storytelling techniques helped the writers deliver at least some sense of character without having to spend so much time focused on it. And while it would have been nice to have a Bolin episode or more on Asami, it would have interrupted the flow and pacing of the series as a whole. We could have done without the shipping episode though; that was always a drag on the storytelling.
But this series really lives or dies based on Korra; it's her story, and everyone else is a side-character. And Korra really does work as a character. Not a person I'd like to hang out with (or trust with any kind of power, for that matter), but she feels very human. Her character starts off abrasive and arrogant, but it evolves into something more reasonable. She never stops being hotheaded, but getting beaten down by Amon and Tarrlok does take some of the wind out of her overconfidence.
I don't think the story really follows through on Korra's character though. And I'm not just talking about the betrayal of the ending. There was an entire episode devoted to exploring Korra's fear of Amon. But we never get a sense that she ever dealt with that fear. There's no one point you can point at and say that she now has come to terms with her fear and overcome it. She's just sometimes not afraid of him anymore. It's like the writers just skipped to the end of that bit of characterization and inconsistently at that.
I think I've said enough about the damage caused by the ending, though. I just wish the writers would learn how to deliver a decent ending to a series; it's sad to see what could have been a great ending ruined by a horrible Deus Ex Machina. Again.
And the Adventure Continues
The Legend of Korra was originally pitched as a 12-episode series. Period. It was only after production was finished that the network decided to add on another few seasons. This is generally considered to be the meta-reason for the Deus Ex Machina ending. They didn't want to end Korra's story on such a downnote; it'd be like ending ATLA after season 2.
Regardless, we are where we are. Book 2, Spirit is coming. So, what should happen?
Given where the series ended, there is one major narrative problem with continuing this story. The protagonist is playing in Godmode. She has access to all 4/5 elements. She has complete control over the Avatar State. Basically, fighting her means you lose. That's pretty much the kiss of death as far as tension is concerned.
So, what do I want the writers to do?
Well, they could simply redact the horrible ending by saying that Korra suddenly has to re-learn those other bending forms. And considering that I clearly think the ending we got was Godawful, you might think I'd want this.
You'd be wrong. The fact is this: two wrongs don't make a right. They screwed up the ending, but fixing it by pretending it didn't happen doesn't make the ending better. I agree with Joe Quesada when he said that Jean Gray should never have been brought back after The Dark Phoenix Saga. But killing her off after she was brought back doesn't change the fact that the damage was already done; it only causes more damage. The best thing to do is to just accept it and move on: create the best stories you can, given what's already been screwed up. To let the attachments flow down the river.
So, you've got a protagonist in Godmode. That's fine; there are ways to handle that. And one way to find those means is to ask Superman comics, where the protagonist has been in Godmode for the better part of a century. Yet they still work.
What you need is a villain that the hero can't directly defeat via their powers. Look at this series; Korra only really won against the Equalists because Amon was lying. She undercut his platform and made his people turn on him. That and they called in reinforcements. Do something like that, with a populist uprising or whatever, except make it so that the leader is irrelevant. She could find him and defeat him, but someone else would just take up the mantle and run with it. The organization would survive.
I would love to see Amon's mask becoming the symbol of such an organization. And after inflicting an Avatar-style beatdown of some Neo-Equalist leader, she would ask him why he keeps getting up, why he won't submit. And that person will say, "Beneath this mask, there is more than flesh. Beneath this mask, there is an idea, Avatar Korra. And ideas are bending-proof!"
The other comic-inspired idea is to create a proper Arch-villain for Korra. This person would need to be Korra's functional opposite. Korra is a master of every element, so this person would be a non-bender, much like Lex Luthor doesn't get superpowers. So this person would have to gain power in other ways, like being a wealthy industrialist or perhaps a non-bender elected to the council to help balance out the horrible government of Republic City. Korra's a fighter, so this person would not be a fighter at all. Not even a chi blocker or anything. Korra wins via brute strength, so this person would have to win via guile and ingenuity. And so forth.
The key here is that this is someone that, like Lex Luthor for Superman, Korra's usual methods don't work on. She can't just attack such a person, not without repercussions. As long as this person is acting within the law, Korra can't really touch them.
The other thing you can do when your hero is in Godmode is to expose them to the dangers of Godmode. And given Korra's general temperament and so forth, she is absolutely ripe for that kind of character exploration. Of all of the good characters in the Avatar-verse, Korra is the one I would trust the least with the Avatar's powers. I want Korra to have a "Time Lord Victorious" moment, a moment where she does something seemingly for the right reasons but is actually horrific. And doesn't care. Because she's the Avatar; what she chooses, by definition, is right.
For example, take the Arch-villain from above. Have this person piss Korra off, do something that is perfectly legal, because they make the laws now, but something Korra doesn't like. Maybe something that's generally bad. And this is the last straw. She declares that this person has to be stopped, so Korra goes over to them and gets Avatar on them.
The Arch-villain isn't a fighter, so the battle is one-sided. The Arch-villain's dragon tries to hold Korra back, but to no avail, and eventually Korra starts beating on the villain proper. But the villain won't relent and just takes it. It spills out onto the streets. And then... the crowd gets involved when they see the Avatar beating up on a non-bender who can't fight back. They surround the villain, and... Korra knocks them out of the way. One of Korra's Ko, maybe Asami, tries to stop her, but Korra says no, she's the Avatar, and she's made her call. And anyone who stands in the way are the badguys.
All as planned by the Arch-villain, of course.
The populace turns on Korra, as do some of her friends. And now Korra has to deal with the fact that her ego made her hurt some innocents, and she's now lost the most important asset of the Avatar: not her bending, but the confidence of the people. So now she has to rebuild it, while still fighting a villain that she just turned into the victim of an out-of-control Avatar.
Plot-wise, I want to see them continue what they had here. I want to see Korra have to fix Republic City, not merely solve its acute problems. I want to see the remnants of the Equalists still around and active. I want to see how the benders respond after order is restored to the city. I want to see if the police force starts including non-benders, and how that affects things. And so forth.
Oh, and I want to see them deal with the question of whether Korra should restore bending even to people who maybe shouldn't have it. Like the various Triads that were de-bended. And I want there to be consequences for these answers; if she chooses to re-bend everyone regardless of who they are, I want to see Triads going after non-benders hard in retaliation. If she chooses who to re-bend and who not to, I want to see some of these people agitating to the council to make her re-bend them.
What will they do
That's what I want. But that doesn't mean that this is what I think we'll get. So what do I think we will get?
Based on seeing how they dealt with LOK thus far, I'm guessing we'll get what we got here: more Sequel Escalation.
ATLA was about the Avatar vs. a Firelord. It eventually became the Avatar vs. a Firelord under Sozin's Comet. LOK was about the Avatar vs. a super-bloodbender who could also destroy someone's bending. Obviously a much more grave threat.
They've already revealed that there will be "The Dark Spirit," in Book 2, which itself will be called "Spirit." So odds are good that TDS will be the Big Bad. Why? Because it's more powerful than Amon, who was more powerful than Ozai.
And what happens after that? Well, more Sequel Escalation.
We've see in The Legend of Korra that the legends of yesterday have become the common man of today. Iroh invented lightning redirection ~70 years ago. Now, some random street urchin is able to do it. Metalbending should have been impossible, and yet, it was done and it spread. And so forth. Even the rules of bloodbending have been broken.
Yet, there is still one rule left standing. One inviolate. It's so inviolate that it's stated at the start of every episode: "Only the Avatar can master all four elements."
The final legend, the ultimate legend, is that of the Avatar itself. So the question remains: with all of these increasingly powerful bending abilities showing up, how soon will it be before the first multibender arrives? It's really only a matter of time.
From a worldbuilding perspective, one could reason that multibending is impossible, that the Avatar can only do it because she is a fusion of the bending spirits of other elemental benders. But the fact is this: to make an effective villain for an Avatar who had mastered 3 elements, they came up with daytime bloodbenders. Technically, three of them, one of them so powerful that he could actually de-bend people with it. For book 2, it appears that the only place left to go are spirits, that this is the only thing that can give a fully realized Avatar a decent fight.
Unless this "Dark Spirit" is going to be the Big Bad for the rest of the series (and hey, it's got Azula's voice, so that's very possible), where else is there to go from here? If the writers insist on these increasingly more powerful threats, they're going to have to pull that trigger sooner or later. They just won't have anywhere else to go otherwise.
Well, maybe someone comes up with a bending machine, or there's a sequestered order of energy benders out there or something. Sequel Escalation for Korra is going to lead to something ridiculous, so long as they insist on making each next threat something that Korra must fight directly.
That's half the point of my Arch-villain idea; it focuses the conflict on something other than Korra's bending prowess. So it allows them to keep a reasonable lid on random uber-powerful benders.
As for the ending of Book 2? After seeing the writers employ Deus Ex Machinas to ruin 3 out of 4 season enders, I have to assume that ATLA season 2 was the odd man out, due to the villains winning. That the writers simply don't know how to write a satisfying ending where the hero wins fairly, with proper setup. So odds are good that Korra will whip out some bullshit in the third act that comes right out of nowhere to defeat the badguy.