No Arma is not a shitty game. Its an incredible, massive, versatile programmable sandbox. Sure when we push it to its limits with 100s of people on a server and thousands to scripts running shit gets a little fucky sometimes. But that doesn't make it bad. Bohemia took a risk by creating this massive scale programmable game. AAA companies don't take risks. They put out the same old stuff reskinned every year because they know it works. The very fact that Arma allows us to create Life servers and King of the hill (2 game modes which more than anything accentuate the issues you described) shows us why it is great and not shitty. What would happen if Battlefield or Call of Duty allowed you to put 100 people on a server and run tons of scripts to restrain, rob, connect to a database, etc.. It would be utter shit, 100x worse than what we have in Arma. And on the other hand, If Arma restricted you to 64 players, had small static maps and didn't allow any scripts to be run on servers it would probably run flawlessly.
You see, you acknowledge everything that Arma does great but you don't give them any credit. You think Bohemia is some negligent money hungry company just sitting on their sacks of cash unwilling to fix anything because its more hassle than its worth? Well, maybe with unlimited funds they could scrap the whole thing and start anew with the scaling issues in mind but that's not how the world works. If it were then we would all have gigabit internet and dsync and lag would never exist in the first place. Bohemia gives us the freedom to push their game to the limits(I once spawned 360 chickens in a circle around me. Did the game lag? Yes. Do I fault Bohoemia for that? No). And if nothing else, that is what makes Arma great.