I've long had a theory that the real problem with "Shades Of Gray", other than it being terrible, is that it was too early for this kind of a clip show anyway. With only two seasons under their belt (and one of them shortened by a Writer's Strike to boot), there just wasn't enough material to stitch together anything even remotely good.
A lot of series do clip shows in their first or second seasons, and sometimes they're even good.
Stargate SG-1 did "Politics" toward the end of its first season, and it introduced a major character who'd be a recurring antagonist for the next several years. They generally did a good job of making their clip shows significant parts of the arc. There's also the underappreciated 2007
Flash Gordon series, which did a clip show about 2/3 of the way into its first season, but in a way that advanced the narrative meaningfully and made sense in context (a supporting character discovered the big secret and needed to be filled in on the background), and the clips were brief enough that it never felt tiresome. And at the time, I kind of appreciated being reminded of the major story threads up to that point, although it's less important on DVD.
(Indeed, when I watch TNG through from start to finish on home media these days, I always end season two with "Peak Performance". I can't even tolerate watching "Shades of Gray" as part of the run anymore.)
I honestly don't think I've rewatched it since its original 1988 broadcast. Maybe once.
In an era where you can watch any episode of any tv show whenever or wherever you want clip shows are irrelevant. Even in 1989 we had the ability to watch every episode of Star Trek on VHS. I understood the need for them long ago but I'll never see them as anything other than a pointless waste of an episode.
Depends on the clip show. As I said, some shows manage to make the frame stories meaningful and important to the arc of the series. A lot of
Stargate SG-1's clip shows depicted important changes in the status quo. The '88
Superboy series did a good job using its clip shows as character studies.
CSI's "Lab Rats" also made pretty good use of the clip/bottle-show format to give a focus episode to the underdeveloped supporting cast, as they reviewed an ongoing unsolved case and tried to crack it themselves.
One of the best clip shows ever is
Gene Roddenberry's Andromeda's "The Unconquerable Man," which ingeniously incorporated its clips not as flashbacks, but as part of an alternate-timeline version of the events of the series's first year and a half. In the pilot, the hero had been betrayed by his first officer and had to kill him, but "The Unconquerable Man" showed a timeline where the first officer had won the fight and had to deal with the same events of the series in terms of his own rival philosophy, and we got to see how the universe unfolded differently as a result. Some of the incorporation of the clips with the new footage was a bit clumsy, but in general it was the most creative and seamless approach to a clip show I've ever seen. It hardly even felt like a clip show, more like just an alternate history in which a few of the same events occurred but had different outcomes.
Then there were the crazy clip shows
Hercules: The Legendary Journeys and
Xena: Warrior Princess did.
Hercules did a couple where the main cast played cartoonish caricatures of the show's
own production team arguing about the show, with the conceit being that Kevin Sorbo was actually the real Hercules pretending to be Kevin Sorbo playing Hercules.
Xena's first clip show, instead of relying solely on clips from past
Xena episodes, used clips from
Spartacus and old gladiator movies and the like to represent the stories that various bards were telling (with Gabrielle recounting Xena's adventures in flashback). And various other clip shows featured the main cast as historical or modern descendants or reincarnations or clones of the original characters.
I think that "Shades of Gray" was one of the last ordinary, disposable clip shows in TV history. Ever since, TV producers who've had to make clip shows have tried their best to make the framing material interesting or important.
(Although not all of them have been good or effective. I'm still boggled that Showtime's
Outer Limits revival -- an anthology series! -- had annual clip shows clumsily knitting various unrelated stories into an attempt at a shared universe.)
I always figured if you had to do a clip show, look for deleted scenes from earlier episodes and see if anything there could be used. At least it would be new to the audience.
That's essentially what TOS: "The Menagerie" was -- using the show's rejected pilot as a flashback.
Gilligan's Island did much the same with leftover footage from their unaired pilot in their first-season Christmas episode, when the castaways reminisced about their first day on the island. Then there was the
Xena episode "Lifeblood," a flashback to the "origin" of the Amazons which was actually footage from a failed spinoff pilot called
Amazon High. I'm sure there are other occasions, since TV producers welcome opportunities to save money.