I began not to like this show after...

Indeed. All the supporting characters were pretty much shoved aside. I also think getting rid of Buy The Book was a mistake, as it served as a hub for everyone.

I literally just said the same thing to my daughter, who is watching season 1 with me on DVD. The show was funny because it wasn't about relationships. Even the episodes with her bf "Dan" weren't as entertaining as others. Her physical humor and day-to-day life were entertaining. I think a lot of people suspected she was gay anyway. Who cares? She was funny!

I get that the coming out was important to the LGBT society. It's shocking to recall the outrage her doing so had caused. Hate mail and bomb threats?!?

Yes...

I remember when the publicity machine was going in full swing about her character coming out on the show, Ellen said that she would make sure that her character being a lesbian would not become the focus of the show...and that's exactly what wound up happening. It really alienated a lot of long time fans of the show, and I did begin to lose interest.

Many people felt that way, including Ellen herself (although for different reasons). I am binge re-watching the show right now and I have to say, the show, although funny, had problems long before that. They seemed to have inconsistent storylines and resorted to stunts as storylines very early on. What happened to Holly from season 1, supposedly a lifelong friend, just disappeared by season 2 without explanation. Inexplicably, Paige enters the scene with no backstory as to the nature of her relationship with Ellen since she was non-existent prior to that. All those cheap stunt storylines with the ballet and the American Gladiators.....it was like the running gag was just to see how awkward uncomfortable and absurd they could all look and act. Ellen, ga ga over her boyfriend Dan and then by the following year, season 3, he has disappeared, again with no explanation or follow-up. Then Ellen's annoying manic cousin Spence, etc etc. It just seemed like a troubled, erratic show from season 2 onward. IMO, I have a feeling there was probably a lot going on behind the scenes that translated into inconsistency in the writing, plot, characters, etc.

I completely agree! I loved the "coming out" episode, but the show should have continued on as usual after that. And, yes, selling/quitting the book store was a HUGE mistake!
It would have been like if on "Seinfeld", Jerry quitting his stand-up job and going to work in some factory or something, and the show only focusing on him and his new girlfriend, and characters like Elaine, George, and Kramer no longer around, SMH.
They should have just changed the name of the show after she came out, because it turned into almost a completely different show.