The reserved list really does hurt great formats like Legacy that include cards covered by the reserved list. The market has gone absolutely crazy for those cards. Many Legacy-playable cards will set you back hundreds of dollars each, and a deck can hit $10,000+. This really limits the number of people that can play the format.
Deciding to keep the reserved list also directly led to the creation of the Modern format, which tries to be Legacy but only with cards Wizards can reprint. Modern has not quite flopped, but is not all that popular considering the amount of resources Wizards has poured into it - and this is attributable to a lack of diversity of decks caused by the more restricted pool of cards.
The reserved list kept the game going at the time, but in the end is probably one of the worst mistakes the company ever made.