The problem is that anyone who'd read the original novel (which would be a fair proportion of the viewers) knew what Karellen looked like all along. Also, it's hardly a twist, given that Karellen had said all along that Mankind wouldn't accept the Overlords' appearance, so they were bound to be either hideous or sinister (or both). The one thing they weren't going to look like were angels.
luckily I didn't read the book and I also skipped all those boring scenes that he was talking through the mirror. so when I saw the ending it was a surprise to me
The alien's appearance was almost the only thing I remembered from reading the book and i figured it was going to be good and it was. I don't think they could have done as well a few years ago. The cloven hooves was a really nice touch.