I think the character was fine as she was probably intended.
I think that the network forced the producers to prolong the stupid subplot that kept Clark and Lana staring at each other and not saying anything at the end of every episode, so they could play sappy pop songs, in the theory that this kept the fan base happy.
For all I know, 90% of the fan base was happy with this. 90% of the fan base probably weren't Superman fans.
Lana pairing with Lex was inevitable and intended from the start. Lana, Lex and Clark were supposed to be a triangle, and Lana was part of the rivalry, and it was intended that each character was responsible for "creating" the other characters.
Clark was created as a boy scout by watching Lex's fall and by wanting to become the fairy-tail prince that he hoped his fairy-tail Lana would want.
Lana was never the fairy-tail taht Clark thought she was. She was human with flaws and her own dark side. Lex was supposed to bring her down to his moral level, and Clark would see this and grow out of his adolescent fantasies, and realize he was in love with a fantasy Lana that he'd created in his dreams, not a real woman. That was when he was supposed to be ready to move on to Metropolis and Lois.
Lex was always probably sociopathic, but probably not a dangerous megalomaniac. But his rivaly and suspicions about Clark, and the competition for Lana, made him drive deeper into lies and deception and manipulation.
They were each driving the other further to the extremes of their natural personalities. We all have a bit of these qualities in us, but Superman and Lex Luthor represent extreme situations. This was the story of how they got there.
So again, I think Lana Lang was fine as originally intended, and in bits and pieces this story came out over the seasons. The major major flaw in the series was dragging out the constant angst between Lana and Clark for too many extra seasons. The network wanted to milk it.
Millar and Gough left the show because the direction they wanted to go wasn't where the network wanted. The direction they were going was dark Lana that Clark would have had to finally reject.
Clark's endless love for Kryptonite Girl, where he dumped Lois like a sack of stinking crap at Chloe's wedding party to get lost in the Lana dream again, this wasn't Millar and Gough's story, they were long gone. This was what the network was pushing on us. Kreuk had a few episodes left on her contract, they could have used that to show Clark growing up and he and Lana settling in as mature friends, like Clark and Chloe are. But no, it was one more shot at displaying endless unrequitted love and longing for each other.
