Some of the shows in season 1 I liked less than others. Season 2 was about the same. But the shows I did like, I liked a lot, so I'm looking forward to season 3.
Celistia banished Nightmare Moon in the moon, not Luna. I thought it was some sort of suspended animation. Nightmare Moon (or Luna) could survive on the moon since that's her element, so Celestia was not excessively cruel in banishing her there.
There's an article on Wired about the 80s cartoons, included the old MLP. They claim that these were so crappy that they had one, unintentional redeeming feature: they forced kids to us their imaginations. After watching the shoes, they would do-over them through play. Apparently bad things can lead to fantastic results. It just needs someone irritated enough to change them.