Sonic the Hedgehog 1 is a template for better games to come.
It has all the pieces, between the feel of the platforming, the level/act structure, the concept of the special stages, and the general look of the Sonic character and world around him. But it's held back by the general difficulty of the game and by how short it actually is.
Excessive use of death pits, spikes being extremely dangerous due to lack of invincibility frames, simplistic but at times frustrating boss encounters (along with a fairly anti-climatic final boss), and the contrast between the "marketing" of the game (going fast), and the actual reality (slow, sometimes precision platforming) makes playing Sonic 1 kind of a frustrating experience once you get past Green Hill Zone.
You can see why Sonic as a character caught on, he's a genuinely appealing design. And beating Super Mario World to market in the US no doubt helped catapult Sega into the dominant position it held during the 16bit era.
But with the benefit of hindsight, it's the weakest of his 16bit brethren.