Yeah, it doesn't deserve all of the hate. I have a lot of fond memories of this film, but I certainly would've enjoyed the Director's Cut a lot more.
The main flaw is the lack of realism. Canonically, Sodor isn't a parallel universe, it's just some British island where trains talk. Sodor and Britain are connected by a drawbridge, which wasn't something made up during the Brenner Era of the show, it was in one of the companion volumes of the Railway Series. Introducing stuff from Shining Time Station into this universe really buggers up the main continuity.
Another thing is how does Gold Dust work? Sure, in this film and Shining Time Station we see that it allows for teleportation, but is it or is it not the reason for the vehicles on Sodor gaining sentience? In STS, we see that Mr. Conductor's gold dust can bring things to life, namely the Mr. Conductor illustration that, when brought to life, began wreaking havoc. I think that needed better explanation.
And, uh, what's up with Mr. Conductor? And C. Junior, for that matter? We can assume that the TATMR Conductor isn't the same Conductor from Season 2 of STS, but then, what happened to the STS Conductor? Is TATMR Conductor a relative of his, like how Junior is his cousin? Is STS S2 Conductor (aka "Carlin Conductor") related to STS S1 Conductor? (aka "Starr Conductor") How do they have any relation to TATMR Conductor (aka "Baldwin Conductor")? EXPLAIN, MOVIE, EXPLAIN!
Of course, who created Lady? The Conductors? Why was she in Burnett's care? Why didn't she ever appear again, aside from telepathically speaking to Thomas in Calling All Engines? What EXACTLY happened between her and Diesel 10? Another thing: What's up with Diesel 10? What about Splodge? These characters are introduced, and nothing is done with them? Why don't they appear again, outside of Calling All Engines and Day of the Diesels, both awful films that are nowhere near as good as this?
What about the other characters from the books, show, and magazines that don't appear here? You could've easily replaced Toby with Edward in the scene where Percy and Henry are being told about Lady. George would've been a great addition, and his subplot sounds hilarious! (I'm glad stuff like this was included in Vinnie Smith's parody) There was even set to be a scene with TUGS characters! TUGS! That's amazing!
And, the elephant in the room, P.T. Boomer. Why?