Bad Export for You: The international English version is still a really fun game when it comes to the gameplay, but the story went from being very complex and developed in the Japanese release, to an Excuse Plot in the English version. There's a fan translation project in the works, so this should be rectified... eventually. Assuming you don't mind using an emulator to play, of course.
Deconstruction: Is it? Very possible, considering the Omega Ending. It turns out that you're an AI in a simulation, your creator wondering whether a single pilot could turn the tide of a war. After he concludes "No", he disconnects you from the Electrosphere and dooms Nemo to repeating the war simulation forever. A chilling metaphor for escapist fantasy in the franchise. This could possibly be why future games retcon the answer to be the exact opposite.
Alternatively, the end result may have been the desired outcome: no matter what Nemo does, Dijon will get deleted from the Electrosphere, which is probably Simon's real goal. Hence, releasing Nemo into the "real" world has a near 100% chance of causing Simon's desired outcome (if the simulation is accurate) and leading Simon to release Nemo quietly into the world. Basically, Simon's backers (presumably Neucom, due to the nature of the research and various news clips) want an AI and/or sublimated pilot that can win any war, but lose interest when Nemo fails to achieve total victory, despite winning every battle; presumably because the potential risk of the research becomes evidently greater than potential gains (Neucom want something to give them a decisive edge against GR and the Nightwing, but Nemo keeps winning too late to risk a war). What they fail to realize is that they were being played by Simon, and their goal isn't what Nemo is meant to do.
Visual Effects of Awesome: Along with another Namco game released at the same time, Ridge Racer Type 4, Electrosphere's graphics are regarded by many to be the best for a (non pre-rendered) game on the PlayStation, pushing the system to its absolute limit with very detailed textures, high polygon counts, realistic lighting, and far draw distances. If it had anti aliasing and texture filtering, it could've passed off as an early Sega Dreamcast or PlayStation 2 game. Like Factor 5 with the Nintendo 64, Namco was the company that put the PlayStation's graphics chip to its best use.