Basically, you could just substitute "Star Wars" for "the Matrix" in your statements and it would apply perfectly. The problem with the SW prequels, as I see it, is precisely what you say: they would have been great if they could have tied a better story to the incredible effects. The story in the prequels was so convoluted and incoherent it had no flow and made little sense, and on top of that the dialogue is so bush-league it's embarrassing. Contrast the prequels to the original SW movie -- in the prequels, there are no characters that draw our attention and emotion. Who are we supposed to care about? The guy who we already know is going to become a ruthless villain, acted by a horrible actor with the worst lines of dialogue quite possibly ever written or delivered? The young Obi Wan, who runs around doing...something vaguely political and confusing, while spewing grade school dialogue? The "queen"? Really? Everyone else is just a cardboard cutout.
The problem with both of these series is that the writers and directors tried to do far too much with the sequels, to the point where it just seems like (1) they're trying to cram far too much material into the allotted space, and (2) they're trying way too hard to come up with creative, complex explanations for all of the cool things in the original films that made them so fascinating. The great things about both The Matrix and SW:IV are: (1) they tell simple, classic stories in the context of cool sci-fi settings, and (2) they focus on a small number of clearly defined characters. Neither the Matrix sequels nor the SW prequels followed this formula -- they both evolved from simple to complex, and from few interesting characters to large numbers of characters that I couldn't give a crap about.
Not that there is anything intrinsically wrong with complexity in movies or stories, of course. If you're going to do it, though, it has to be done carefully and gracefully. Both the Matrix sequels and SW prequels come across as anything but.
I'm not sure any actor could overcome the horrid dialogue in those movies, but good points. I mean, I consider Samuel Jackson and Ewan MacGregor to be pretty solid actors, and even they are forgettable in these roles.