Yeah, Kilkenny were unplayable that day, probably the most perfect performance ever in a final. The Waterford team didn't have the experience of being in and winning finals, so they just crumbled.
They were a very good team, just inconsistent. In terms of success, they didn't win the All-Ireland. But in terms of excitement, I'd say they were the most exciting team to watch, but I am bias so I dunno. Kilkenny were obviously a much better team but they don't have the same level of aura that the Waterford team has for neutrals, although that could be more to do with universal sporting love of the plucky underdog, and everyone gets fed up of almost invincible teams like Kilkenny. It's not always all about results though.
Waterford's style was off-the-cuff which was unpredictable and risky, but very exciting. Players taking shots from ridiculous angles. Some days it worked, others it didn't. Then there's crazy stuff about players drinking, and terrible pre-match preparations (e.g. emergency transport to Croker after a flight from Waterford-Dublin was cancelled on the day of a match), the likes of which probably didn't go on in Kilkenny with Cody's well-oiled machine and professional setup.
I'd say the Waterford players were liked more than other team's because of their looks and style - this was before helmets so players were much more recognisable. Waterford had some distinctive characters that other counties didn't have, like Mullane with his white head, sticking his fingers up at Cork fans after scoring a hat-trick, getting sent off in that Munster Final for hitting the Cork lad in the balls. Henry Shefflin was the best hurler in the country but boring as fuck personality-wise, like the rest of the team. Might be a class thing too. Waterford seemed to be more working class lads whereas Kilkenny seemed like a bunch of guards and management types.
I think the noughties Waterford team were good enough to win one All-Ireland at least. Waterford only broke through as a proper team in 1998, so they didn't have the experience and professional setup as good as Kilkenny and Cork, or the confidence that decades of success and All-Ireland titles brings. Someone mentioned giving up on Mayo earlier...I don't know if I am ready to give up yet, but it's hard to see Waterford win the big one when we haven't been able to even get out of Munster for the past five years.