...you have a piece of crap car based on the old Golf that costs more than the new Golf yet has less room, practicality, etc. If you strip away the retro from the 500, you have a slightly impractical Fiat Panda that drives a hell of a lot better. The same with the Mini.
The 500 isn't apparently any better to drive than the Panda, and comparing like-for-like (say, Panda 100HP against the 100bhp 500) the 500 is supposed to be a little wooly and soft.
But I digress. I'm not a big fan of the Beetle, more like I think "it's okay" but some of the criticisms leveled against it are a little harsh. The Beetle is no less practical to the Golf than the 500 is to the Panda, and performance suffers no worse in comparison between the two pairs either.
The MINI is a standalone car so can't really be compared (instead, BMW releases models like the Clubman and the upcoming SAV version which make the car more practical but ruin the looks of the original).
The Mini and 500 are successful (and quality) because if you strip away the retro bits, you have a car that attempts to rectify with the original in some meaningful way. The 500 is closer to the old 500 than the Mini is, but the Mini at least shares the fun-to-drive aspect that the original car had if nothing else.
I'd argue that the MINI is closer to the original, thanks to it's road manners and the fact that it shares the same layout. Much as I like the 500, it's equally as much of a fashion trinket as the Beetle is. Both cars are bigger and have a completely different drivetrain layout to the originals.
The Volkswagen New Beetle, however, is nothing but a fashion accessory. The very worst kind of retro design, it exists solely to appeal to those who viewed the original car as a fashion accessory without bringing any of the other characteristics that made it endearing to those who didn't drive it because it was popular.
That's not really worthy of berating the company, nor the people who buy the cars though. Many buyers wouldn't care, nor notice, if it was rear engined and rear drive, for example.
The MINI is a fantastic car but there will always be a collection of bearded gits who think it doesn't deserve to exist because it isn't tiny and doesn't have an A-series engine. And plenty of modern buyers who buy the MINI don't give two short stuffs about the heritage of the original, nor care how the modern car drives. We're just lucky that BMW did want to build a genuinely fun car - because they'd still sell loads of them even it was rubbish, just because many buyers only want the styling and the ability to decorate the roof with their country's flag.
In essence, VW provided the market with a pastiche with no link to the original save for the name and styling that echoes the original. And they still found plenty of buyers, just like BMW would have if the MINI was a disappointing handler.
The thing that did change was that VW ran out of yuppie idiots to sell the car to.
I'm expecting from this comment that the market for the car is probably very different in the States to that of the UK - I can't recall the last time I saw a new Beetle driven by anything other than a young woman. The yuppie idiots you're referring to probably are the sort of annoying people who buy it solely as a fashion accessory to go with their Aviators and their brand new cellphones. In the UK, girls just think it's cute and don't really care about the original.
Calling the New Beetle a good car is essentially tantamount to saying the Chevrolet SSR was, or the Ford Retrobird was... and the only difference wth the New Beetle is that VW is irrationally committed to producing it regardless of the fact that no one buys into it anymore
The Beetle isn't a bad car though - even if it's not an especially
good one. It's just a Golf for buyers who don't want a bog-standard hatch. It wouldn't be so bad for VW if they took the opportunity to go in the MINI or 500 direction with any new New Beetle, i.e. smaller, more chic etc, just as I mentioned earlier. The car isn't doomed, it's just not being executed properly for today's buyers and car enthusiasts.
I think the other thing to highlight is that, as a forum of genuine car enthusiasts, we may know our stuff but we don't have a particularly good handle on what the general public as a whole want. If we were right about everything, then no manufacturer would
ever sell a single crap car - yet they still sell...