WinPhone8.x is a fantastic mobile OS. The interface is great. I've dealt with some bugs since switching to the developer preview, but that's to be expected, and my experience running production code was always rock solid.
But the app situation is abominable, and getting worse. The Xbox program seems to have been all but abandoned. Microsoft seems to have largely given up even monitoring the app store; half the top/new games on the lists for the last several months have been blatantly pirated material, either blatant copies of whatever iOS/Android fad is running at the moment, or actual emulator ROMs of old console games running in a buggy, half-broken wrapper. They don't even have an actual category for reporting copyright infringement on the report form.
They've also made some missteps on a fair few occasions regarding their own apps, especially with the move to 8.1; replacing or breaking the existing functionality like the Xbox Games portal and the Music app.
On the technical side, there's also some issues regarding app support and limitations on both hardware and software. Manufacturers have to agree to very strict tech specifications in order to license WP, so very few other than Nokia have ever bothered to take them up on it. WP apps are heavily sandboxed and limited in a way reminiscent of pre-multitasking iOS, and the official line from MS seems to be that the only acceptable way to build WP apps is in C# with .NET on Visual Studio. Period. Very grudgingly, HTML5 apps are supported. Other options are possible, but largely only through workarounds, which often are grossly undocumented or hacky. Even MS' own other languages, like VB.net and F# are not officially supported, save as libraries in the latter case. (though again in the latter case, MS seems to not believe anyone should want to build full apps in pure F# at all.)
The OS and the interface themselves are great, and some of those limitations are no doubt part of why by forcing a more predictable environment. But a lot of it just seems to be MS repeatedly shooting themselves in the foot, and I dread to think how much worse it would get if MS had any actual leverage on the market.