That is true. The sheer amount of players within the gaming community will never be matched. Halo 2 was special. I felt like they did a decent job handling cheaters. It may seem like they didn't, but you have to remember the next point you made: the extreme amount of players made it difficult to sift through.
Dual wielding in and of itself was fine. It was a good strategy at times. It was a situational weapon option. It should not have been the primary focus of multiplayer because it broke down at a certain skill level. Spawning with a dual-wieldable weapon when your melees and grenades do next to zero damage (speaking of pre-patch gameplay) forces every player to look for a new weapon immediately upon spawning, whether it's a weapon to pair with the SMG or a non-dual-wieldable gun that can carry itself. That slows down gameplay and puts newly spawned players at an extreme and automatic disadvantage. SMG spawns didn't work. But Bungie wanted to feature dual wielding because it was the big innovation in gameplay from Halo 1, so that's how they set it up.
I could write a book on Halo multiplayer, what works and what doesn't. Or I could just say this: Halo 1 was nearly perfect. Nearly any change Bungie made was a change in the wrong direction. But the amazing thing is that, as far as they've fallen, the Halo games are still decent at worst. They've regressed a long way, but they haven't hit rock bottom. Halo 4 may be that point, though. I guess we'll just have to wait and see.