In the long run, I think "Obsession" is more valuable for giving us (as a few other episodes do) a glimpse into who Kirk was before he was Captain of the _Enterprise_, than for the plot itself, which as you point out could be better.
As for the terrible makeup--it's worth remembering that a lot of the audience was watching this, first time around, in black-and-white, and even if they had a color television, early color TV wasn't that great (NTSC is often joked to mean "Never Twice Same Color"). This is also why Star Trek abounds with such bold colors in the first place--RCA, which owned NBC, which aired Star Trek, was trying to sell color televisions!
In the long run, I think "Obsession" is more valuable for giving us (as a few other episodes do) a glimpse into who Kirk was before he was Captain of the _Enterprise_, than for the plot itself, which as you point out could be better.
As for the terrible makeup--it's worth remembering that a lot of the audience was watching this, first time around, in black-and-white, and even if they had a color television, early color TV wasn't that great (NTSC is often joked to mean "Never Twice Same Color"). This is also why Star Trek abounds with such bold colors in the first place--RCA, which owned NBC, which aired Star Trek, was trying to sell color televisions!