It doesn't surprise me that season 1 ranks lower than 2 and 3 in the minds and imaginations of SB-enthusiasts.
Season 1 had a lower budget, which translates into a lower quality of animation, which any comparison of season 1 with any other season will make blatantly obvious.
Like many other shows--The Simpsons immediately comes to mind--in the first season the writers, animators, etc., are still getting a feel for the characters. So the way they think/act/etc. is necessarily shifting. Again, The Simpsons provides a better example of this than SB--just watch a season 1 episode: it's a trip! (especially Homer.)
Season 1 is also a lot slower, in my mind. People egg on the last couple seasons for the exact opposite reason (too much pushed into one episode.)
Finally, the first season of just about any show will be distinguished by introductions. Much of SB's first season (especially the first half) has episodes focused on introducing us, the hopefully-soon-to-be captivated audience, to the antics of SB and the other characters, from jellyfish to bubble-blowing to Plankton's role to SB's physical weakness to his inability to drive to Patrick's stupidity to Squid's clarinet-playing (and failure thereof) to Sandy's athleticism to Mr. Krab's greediness-------and the list goes on.
The point is that much of the first season was water-testing, and many elements were retained when they resonated with viewers, as we're still treated with episodes that focus on the list I gave above. But others were thrown out: the character "Bubble Bass," who appears as the archnemesis in "Pickles," was (as I mentioned in a much earlier thread) likely being considered for a recurring role like Mrs. Puff or Larry the Lobster, but was dropped for whatever reason. We get good evidence of this because he shows up again briefly in the mid-first season episode "F.U.N." And that's the last we ever see of him.
The first season has great, classic episodes, no doubt about it. But I concur with many others that most of SB's finest moments are in episodes of the 2nd and 3rd season.