Tom, I'm a bit shocked! Usually my opinion is so close to yours. It's like you know exactly what I want to play and recommend it to me! But... this? Heavens to mergatroid, no!
I really like From Dust. The controls would definitely be better suited to a PC but the fact is we live in a console-oriented market these days so some compromises must be made. Which sucks, because we all know that the PC master race is infinitely superior to the console peasants, but let's not get into that right now.
That being said, I don't see how you could consider the graphics anything less than stunning. As you said, the tsunamis are an incredible sight, though I consider them such even now, after having played through a series of "avoid the tsunami" challenges. I find the lava and water effects to look absolutely gorgeous, and the solid terrain is no less impressive. The entire game has an aesthetic that speaks to me in much the same way that Shadow of the Colossus did, and I regard that game as the best of all time.
Beyond that, I find the experience of the game to be the truly telling part; sure, it's not Black and White or Populous but I don't think it's trying to be; it's an entirely different beast. Where Black and White and Populous were about the villagers under your control, From Dust focuses entirely on the world the villagers exist in and your ability to manipulate it. Even the powers they can get, like Repel Water or Evaporate, are entirely built around allowing you to manipulate the world even further. It's not so much that From Dust fails where Populous succeeded, it's that it approaches the subject from a different perspective and gives you a different focus.
I agree that the purpose and background of the villagers could be better expanded upon and that the random animals that appear could and should have a bigger impact on the game as a whole, but I don't think that detracts from the experience From Dust offers. After all, we had no idea what the story of Shadow of the Colossus was until we experienced it and, even then, all we have are educated hypotheses and some intellectual debate about what really happens. It's because of that ambiguity that From Dust appeals to me so much.
I spend most of my time playing the game altering the world until it works to my liking. I get to the point where I know I could easily reach the end point of the level and then proceed to screw around with the terrain. In the level High Tide, I spent an extra twenty minutes making sure the dams I built were to an acceptable height. In another level, I covered every inch of rock I could find with sand, just to make the island look more habitable.
I think there's a bit more to this game than meets the eye and I'm not sure where your hate for it came from. Of course, I trust in the Chick and am sure you have your reasons. Nevertheless, I thoroughly enjoy it and hope that others don't write it off so easily!