Why is Bioshock 1 so praised?

[Frogger]

Wright said:

Yet atmosphere is broken at times. Especially with the horrible final boss battle and crappy endings, which apparently can be overlooked, for example.

 

If it's immersive atmosphere through gameplay what truly sets Bioshock, then why Bioshock 2 was less praised?

No one overlooks those. Bioshock isn't perfect, but it's praise is justified.  I've never played Bioshock 2, so I can't offer any help there.