It's over hyped.
Although any single game that can save a console from absolute ruin more or less deserves the hype, particularly among fans of the platform.
It's sold well by any standard, although 2 and 3 definitely rode in upon the coattails of Halo CE, which is what really made the FPS genre a phenomenon for consoles for the first time since N64 007. Halo 2 and 3 just kept the momentum rolling.
Is it the best FPS out there? That's a personal preference call, but most will say no.
If you have an emotional investment in Master Chief and the Halo Universe, then that goes a very long way.
If you don't, then it's a good franchise, but far from the best.