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The drawbacks you mentioned are accurate. However, it's also important to remember the strengths, such as the excellent hero development system, the flexible and easily customizable quest system, and the landscapes, which are quite decent compared to the third installment... Don't rush to call the game a failure; many people enjoy it.
I agree; the game could have been good if NWC had been given the time to create it. But with creditors and bankruptcy looming, NWC tried to save the series. They released expansions and, without salaries, worked on Heroes 5, but everything collapsed and was bought out by Ubi. Later, Kennegem apologized to the fans for releasing games like Chronicles of Heroes and Heroes 4; they simply needed to save the company.