Windows ME could be utter crap under specific circumstances. Otherwise, it was essentially Windows 98 Third Edition, with a few new bits ported in from Windows 2K but nothing revolutionary.
One issue was driver stability. ME made a big push for newer WDM drivers, while still supporting older VxD drivers. Good for newer hardware, especially USB devices. However, older third party VxD drivers sometimes conflicted with their newer WDM counterparts, leading to instability. So if you had older hardware, it was sometimes better to stay on 98SE.
Another issue was the DOS subsystem. ME eliminated the DOS startup phase prior to loading the Windows kernel, as it was always a source of instability. Good for eliminating weird system freezes. However, that prevented loading DOS drivers or TSRs, including HIMEM.SYS and EMM386.EXE. Worse, ME didn't emulate Upper or EMS memory in DOS shells by default (1). That all made for huge incompatibility issues. So if you had older DOS software, it was sometimes better to stay on 98SE.
A third issue was with the new system health features, such as system restore and system file protection. They didn't always work properly, leading to instability. The issues were mostly fixed over time, but the bad impression remained.
If you were running Win16 or Win32 programs on a newish machine, ME was great once you applied all of the hotfixes. But if that wasn't the case, then 98SE or 2K were the better choices.
/1 - you could enable EMS support via some keys in system.ini, but it didn't always work