firstly, this site is mostly focused on quake1, so expect responses to be slightly biased.
With that said... QuakeII sucks.
Your list of advantages for QuakeII is basically that it and its derivatives are well known. Well... That applies to QuakeIII just as much. And the derivative of the original Quake is of course halflife, which is muuuch better known than kingpin, and actually worked without crashing, unlike daikitana.
You mention that QuakeII doesn't use QuakeC as a good thing.
On the contrary, it causes mods to become binary-dependant upon their customized engine. They no longer exist in separation from the engine the creator favours. The saved games of QuakeII dlls is utterly utterly vile, and breaks your saves for any new versions (potentially of the engine too).
But the biggest problem is that mods are typically closed source, dependant upon a specific engine, and stuff. This limits the community away from QuakeII and towards the specific mods and the engine that they depend upon. Imho.
The reason you don't really get Q2 mods with only minor stuff like a single weapon added is more because of the era, rather than the engine itself. You don't get many Quake mods like that either, nowadays.
You say that bringing Quake One to the standard of Quake2 will take time. FTE, for example, already runs QuakeII mods. :P
Point is, Its not really the engine, its what you do with it.
Imho, the only real difference between Quake and QuakeII engines is how they mold their community.