Judging from what you say, I think your comments apply to the Featured Items Flash 3D module not this one: http://www.spiralscripts.co.uk/Extension-Examples/featured-items-flash-3d-example.html.
Basically you are right, rotating and animating the image can cause a bit of drop in quality, this is due to the limitations of the algorithm. I spent some time looking for a cure for this, there is not a quick fix for it. You can reduce the problem by making sure it is a good quality image to start with, also introducing a slight blur into the image, and reducing the contrast can help.
I think your rating is somewhat unfair based on this fact alone, with a bit of tweaking of the image it is generally possible to get a pretty good effect.