Bad special effects don't ruin a story for me, any more than it ruins the story of a play if I can see the stagehands rearranging the set pieces between scenes. The enjoyment of a work of fiction involves the willing suspension of disbelief: we know that what we see is merely simulated, but we choose to play along with the illusion.
I'm a child of the '70s, so I grew up with special effects that were more impressionistic than photorealistic. I learned to accept that VFX were just a suggestion or approximation; my role as a participant in the process was to use my imagination to envision what the FX were suggesting, just as I would use my imagination in the theater to pretend that a wooden stage was actually a grassy field or the deck of a ship.
Besides, the fun thing about old-style effects was that you could often see aspects of how they were created. To me, that's always been the most interesting thing about special effects -- the techniques behind them, the tricks used to create them. As long as I believe the FX artists made the best of what resources they had, as long as I see creativity being applied, I'm satisfied -- and the less money and technology you have, the more creativity you need.
Why are these shows so bad at effects in the 70s. Star Trek was made in 1966 and looked better. It can't be just a British thing since both UFO and Space: 1999 had more convincing sets and model work.
Budget, technology, talent.
Star Trek had a modest budget for an American SF show, but it had tons more money than
Doctor Who or
Blake's 7, and it was using film instead of video so the techniques available were more advanced. Also, ST had up to five of the top VFX companies in Hollywood at the time doing its episodes on a rotating basis.
Who and
Blake pretty much had their FX done in-house at the BBC. Whereas
UFO and
Space: 1999 were produced by Gerry Anderson and his team, who'd become quite expert at miniature FX in their "Supermarionation" puppet series, and included artists such as Derek Meddings, who did the miniature work for many James Bond films (though Meddings didn't work on
1999).