This blog post go me thinking about why Ravenloft worked for me as a setting. In it the author expresses his ambivalence about the demi-plane of dread and talks about how the cliche-nature of many of the domain lords (and the overall static nature of domains) just didn't work for him. I think a lot of people feel that way, and I can see how some people might not enjoy it. I also have spoken to people who really liked the promise of Gothic Horror but feel it failed to deliver. This is fine. People should have different tastes and it isn't a bad thing that some folks like something while other folks don't. I do think those reactions are fair but my feelings about the lands of mists are different and I want to explain why I think it worked for me.
I think the criticism about cliches is basically true. The setting draws pretty deliberately on Horror cliches and in particular cliches from classic hammer and universal movies. The criticism that it isn't gothic in the tradition of gothic literature seems sound to me too. I read quite a bit of gothic literature in high school when I first got into Ravenloft but I am hardly an expert on the subject. Still it does seem more inspired by the classic horror movies I watched growing up than the works of people like Sheridan Le Fanu (I do think novels like Dracula and Frankenstein had a big impact on Ravenloft though).
For me both of these things work just fine. While I am sure a setting based heavily on gothic literature could be great, I think what I really wanted when I first opened up the original black boxed set in 1990 was a setting that felt like the old horror films I watched with my uncle as a kid. For me it hit that tone really well, and it had a strong Hammer Film vibe that worked too. I always pictured Ravenloft in black and white (like the gorgeous Stephen Fabian art that accompanied the early books). That look and feel pulled me in.
While people like to dismiss cliches, in gaming I don't necessarily think of them as bad. The original lords of Ravenloft were largely based on well known fictional and historical villains like Dracula, Frankenstein's Monster, Caligula, Vlad Tepes, etc. I think these characters appealed to me because they were familiar, which made them instantly easy to run. You wrapped your head around the character very quickly and so did the players. But there were also less familiar and very colorful domain lords who were either new concepts or based on more obscure villains like Harkon Lukas (my favorite) and Baron Urik Von Kharkov (who started life as a panther before being polymorphed into a man and then becoming a vampire).
Another major complaint you hear is that werewolves and vampires are not scary because people know what to expect, they've seen them again and again. While I think this can be true, Ravenloft devised a creative response to this problem.
I always ran Ravenloft as a full campaign, for me that just worked better than the weekend in hell concept. I had been doing that since the first boxed set, when the material was primarily organized for small excursions from other campaign settings. I learned that the best way to run Ravenloft is to downplay the dark lords and focus on things at the ground level (Flesh Golems, Werewolves, etc). There really isn't a need to have the party face the dark lords when the dark powers themselves allow you to customize each villain they face.
This is the heart of Ravenloft for me and why it worked so well. A major conceit of the setting is that the dark powers can alter people who perform evil deeds. This allows you to shape each villain to your liking. You can customize his or her powers, appearance, nature, etc. A villain might even approach the powers of a Dark Lord, controlling a small area within a domain (a haunted house, a river, etc). With the release of the Van Richten books this concept expanded to all monsters and threats (there was some treatment of it in the black boxed set but the Van Richten books crystalized the idea).
In the Van Richten books you get both the tools and the explanations and examples of how to customize each monster. The idea here being that few werewolves or vampires in Ravenloft are uniform. Every monster will have its own weaknesses and strengths (and their power levels will vary considerably depending on things like age). This is how you get around the issue of the vampire being old hat and in my experience it genuinely works. When silver is useless against a werewolf, suddenly it becomes scary again as the players struggle to find its weakness before it tears them apart. It also naturally leads to what I think was the best adventure structure for Ravenloft: The Monster Hunt and Investigation.
One of the reasons I was able to sustain long term Ravenloft campaigns (at least in my view) was because I focused almost exclusively on adventures that were about hunting monsters and employed investigative structure. This makes sense when the premise is each monster is different and its weakness needs to be discovered before it can properly be confronted (and this concept is pretty explicitly stated in most of the Van Richten Books).
For me at least this is what worked.