Having to lead targets by 3-5 feet (varies depending on the ping of the person you're aiming at) with instant shot weapons like a sniper or pistol rifle completely neuters the potentially good time I'd otherwise have been having.
Yeah, the netcode was atrociously bad to the point it's hard to imagine without having actually played it. It was even worse pre community edition.
I seem to remember hearing that there's some minor amount of bullet physics/travel involved with all the guns in Halo, i.e. no true hitscan-weapons. Unless I'm misremembering (it's been a few years ;P), you would notice this on some of the longer/open maps like Blood Gulch where you had to aim slightly above someone's head to actually hit them there from across the map.
The thing I've never liked about Halo multiplayer is the reliance on powerweapons, much like Goldeneye on N64 though not so extreme. Though at least in golden eye you could smack your opponent with a pillow when he whored the golden gun.