Saying "it has potential" doesn't really have any meaning, to be completely honest. I doubt people would say that if this wasn't a Final Fantasy game. There's lots of other games that have potential, including every other MMO that had a shitty launch (Age of Conan for instance). It's not really contradictory- it means the game in its current state is pretty crappy, but it can be fixed eventually...that is, assuming they bother. With the SE I've known the past 6 years playing XI, I'm not so confident myself.
I'm under the impression that XIV had many of the same problems in development XIII did, in that they sat around just waiting for Crystal Tools to be finished a large chunk of that time, or it was a lot of brainstorming and not a lot of doing.
Remember when they said it wasn't going to be a Final Fantasy game?
Remember when they said the game wouldn't have any actual levels in the conventional sense?
all this negativity over the game is just hyperbole or is really that bad?
It depends. If you're someone who has played many MMOs before, which is one of the main audiences for this game, then no, it's not hyperbole.
If this is your first MMO you probably won't notice the horrible UI and such nearly as much.