That's true. Making the main antagonists of a ground-based RPG living spaceships was a weird decision.
And, of course, ME1 wasn't perfect. In some respects it was inferior to the other two. ME2 had in a lot of ways the best character interaction, and ME3 the best combat gameplay. But ME1's story and atmosphere was unsurpassed, and to me at least, that's the most important element. The trouble was that ME2's central plot was both stupid and completely irrelevant. ME2 needed to do a ton of things, and it did almost none of them. It needed to be about gathering allies and information about the Reapers, and instead we got "lol look Collectors". And the Collectors were built up as a major threat in and of themselves, rather than being the pawns of the Reapers that they were.
Also, the whole "gathering a team" thing would have worked a lot better if the focus had been gathering a team to fight the Reapers. With the Collector base (or whatever final mission) being sort of a first test run. And then, you have the same teammates into ME3, rather than having to do the whole tedious regathering the team thing again.
To elaborate a bit on my alternative conclusion: essentially, the Reapers are sort of an afterlife. If we take, for example, Turians: in order to make a Turian-Reaper, you have to liquefy a couple million Turians. However, once you do that, the resulting consciousness includes every Turian who ever lived. There's a sort of genetic memory technobabble handwave thing. It doesn't include the ones that are still alive, but once they die they get assimilated too, provided the Reaper isn't destroyed.
The end of the series, then, gives you three basic choices, each with a paragon and renegade variant. You can either just go along with it, which is a happy ending because everybody gets to be a giant space cuttlefish and reunite with their dead loved ones. Or, you can tell the Reapers to piss off and come back later, and they're just like "okay, fine. But next time you're going to college, kid!" which is sort of a happy ending because that's pretty much what your goal was to begin with. Or, you can convince the Reapers to stick around and be responsible parents, teaching the races of the galaxy about stuff rather than running off to dark space and getting drunk with their friends. And that's a happy ending because the cycle still continues, as it should, but the galaxy now knows what to expect and won't have to experience all the terror and confusion.
So, yes, the Reapers pretty much do whatever they want. You can convince them to alter their behavior slightly, but you can't break the cycle, because the cycle was never a bad thing. It just looked like one from a limited perspective.