I didn't find #1 bad, I just think 2 was much better. I really enjoyed #1 but it was the wrong villain to start the franchise with.
I hope they don't stop at number #3 though. Spiderman has been Marvel's best selling comic hero in history, there are many plotlines they have available and endless victims to work with to create more films after.
What villains would you like to see in upcoming Spiderman movies?
I'd like to see:
Elektro
Scorpion
The Lizard
Carnage (though his story was tied to Venom's)
Kraven the Hunter
Morbius
Chameleon
Hydroman (with the whole Mary Jane storyline)
Other villains that I liked but are probably not movie material:
Tombstone
Smythe (and his Spider Slayers)
The Red Skull
I know that the Kingpin was Daredevil's main enemy but he was in almost every single Spiderman cartoon. They should introduce him at some point...