This is one of the few good TNG episodes. By the time they got to seasons 6 and 7 they started to finally have decent episodes. I actually started to look forward to them when these season's were on the air.
Looking back on this episode after getting my BA in Pscyhology is very interesting and fascinating. I actually used a similar concept in a story I wrote while still in college.
At "one of the few good episodes". There were literally DOZENS of episodes better than this one.
Seriously. Each season has quite a few good episodes - even seasons 1 and 2.