Not so: people hate it because it goes meta (to a greater extent than most of the other episodes), because it retreats into allegory and humour and fourth-wall-breaking rather than providing a clever resolution on the spy-fiction level; but everything in it makes sense. McGoohan, evidently, had a Catholic attitude of fundamental pessimism about the human condition. He believed that the root problem with human society was human nature, and he didn't share a Randian belief that autarkic superman individualists were blameless, or a Star Trek utopian-socialist belief that the future would raise up a New Man to sort everything out, or a conviction that everything will be groovy once the Revolution comes. Given that, there's basically no one else that Number 1 could be (notice that Pris. doesn't look very surprised to find out), and no other way the series could end (nothing changes, basically).

There were huge complaints from viewers. Interesting write-up here:

http://www.rotten.com/library/culture/the_prisoner/

Be seeing you.