Grados are not the only good headphones out there but they do deserve their place at the table. I've owned other brands - including several Sennheisers (HD650, HD800), several beyerdynamics (DT770, T1), several AKGs (K701, K241 Sextett), several Sonys (MDRV900HD, MDRXD200), several Kosses (including the PortaPro) - and have had the good fortune to try out lots of others, either through vendors or good friends.
There are lots of good headphones that excel in one way or another. Some have more soundstage; some have more bass; some have cleaner, more articulate, mids; some have tremendous comfort; some just look cool; some are wonderfully cheap and some just take a beating better than others. Grados are my favorite, though not because they're the best in every category.
Grados are open, so there's no sound isolation, though I think this point gets wildly exaggerated. There are lots of venues where I don't have a problem wearing my Grados, though there are others where I'd rather use an IEM.
Grados don't pump out the most bass but what they can produce, if you approach them right, is amazing. Right out of the box and unamped, the little Grados don't have much bass unless you stick to the smaller pads (like the comfies and the flats). This is easily remedied, through a simple mod, but I think Grado prefers having customers come back for the more expensive editions using wood shells. What's nice, even at the bottom of the product line, is that the bass is not "bassy" and "bloated." It's tight. With the right amp, you can make an SR60 scream and thump, which is what you'd need to get decent bass out of the HD800 and the T1.
Grado likes to use mahogany shells, which makes sense because mahogany is a versatile tonewood that's not so hard (800 lbs-force on the Janka scale). With certain tonewoods - like cocobolo, Brazilian rosewood, Bolivian rosewood, et cetera - you get even more thump. While I like mahogany very much, I like cocobolo a lot more, even if it's a bit harder to cut. Not every headphone manufacturer deals in natural materials, so it's to Grado's credit that it does.
Grados aren't the sturdiest headphones out there but durability has to be measured in more than one way. There aren't the chipping issues associated with the HD600/650 cans, because Grado doesn't employ the same architecture in its headband. In dealing with the plastic Grados, I've encountered precious few issues regarding workmanship. It's when you jump to the woodies that issues come up with any real routine. The rods sometimes slip off the aluminums, which are heavier. A spot of Super Glue fixes the problem in seconds. Similar issues arise with the bushings with big, heavier, cups because Grado uses the same architecture with the larger, heavier cans that it uses with the ligher ones (though the gimbal rings are metal instead of plastic). My first pair of 325i's had these issues but when I wiped out on my skateboard, I was surprised that my headphones only sustained some minor scuffing.
Grado doesn't use fancy cabling, nor does it make it easier to upgrade the cable with aftermarket wire. That's a mark against it. On the other hand, it uses premium copper wiring and employs four- and eight-connector cabling on most of its headphones. The eight-connector cable provides twice the copper and halves the impedance of standard 24 awg wire. You can do better but for the price, it's not a bad deal.
Some fault Grado for using simple galvanized flat wire to give structure to its basic headband. On the lower Grados, this is vinyl; on the upper Grados, it's leather. There are certainly cushier headbands out there. On the other hand, I like the relatively light footprint of the Grado headband. Some people - including some bald people I know - are not big fans of the Grado minimalist headband. I, on the other hand, like a small footprint. I don't want a helmet. To each his own. The K701 and the HD800 have lusher, more widely-displaced headbands, but they were more high-profile than I liked.
Some people hate the free-spinning gimbals. I can relate to the frustration that comes from the spinning cups and their impact on the separate cabling for each cup, after the Y-split. Grado could fix this by limiting the free swing of these cups. I suspect the reason it never did was the borrowed elegance from the PS1/HP1000. Those cans had the issue more under control because of their built-in rod locks. Grado has missed an opportunity by not designing the modern headband to incorporate this same feature. Undoubtedly, Grado blew it off (once it started producing lighter headphones) because of the added production costs - in both materials and labor - but it should have found a way to incorporate this feature rather than abandoning it. Even so, this issue is greatly exaggerated by people whose headphones have little, if any, swing to them at all. Nobody ever cracked their Grado headband by pulling too vigorously on the cups in putting the headphones on. If given a choice to go on with them or without them, I'd stick with them and simply improve the design to make it more user-friendly.
I like the Grado cable better than the Sennheiser cable that comes with the HD600 and HD650, which is veritable lamp cord, capable of getting the job done but ugly as sin. To my eyes, this cable looks like something you'd see hooked up to a video game system. I suspect that at least some recabling is an attempt to get rid of this Frankencable. Grado's simple, black garden hose isn't the most elegant cable one could imagine but it's like black leather wingtips and a charcoal gray suit. It gets the job done with its own unstated elegance.
Grados also get bashed for comfort. Most of this is an argument against supraaurals. As long as the cups press against the pinnae of the ear, there's going to be a time limit on how long you can wear your headphones before your ears ache. I grew up with this style of headphone, before the arrival of the little thin cups that preceded earbuds. I'm used to having to take headphones off every so many hours - get a drink, hit the bathroom, pet the dog - before putting my headphones back on. So, for me, it's not an issue, but this generation is more demanding in that department. That's partly because of earbuds and IEMs. It's also because of the arrival of circumaurals. There's something to be said about physical contact between the pinnae and the cushions. There are pros and cons to replacing this contact with a circumaural shell or cushion. Grado does have circumaural padding on the GS1000 and PS1000. The foam cushions are not as soft as leather but there are benefits to using transparent foam. As a creature comfort, lambskin leather would be a nice alternative though it would not be as transparent. The HD800 replaces most of the cushion with a cushion-tipped lattice that strikes a balance between transparency and bass capture.
In terms of sound, I like the fact that Grados are among the few full-size headphones that don't apply filters between the ear and driver. What you hear is coming straight off the driver. Filtered drivers offer more "refined" treble but they also provide less energy and certainly less sizzle. For the same reason audiophiles buy supertweeters that push beyond the audible spectrum - for the energy they provide - Grado listeners enjoy the sizzle, the practically-percussive treble that comes off Grado drivers. Grados get criticized as "colored" because of the upward treble spikes, where other headphones go into a treble suckout. Looking at the FR charts, I don't see any flat responses. On the other hand, for most of the spectrum, Grados are amazingly flat, especially throughout the mids. Where Grados could use more balance is in making sure the bass response keeps up with the treble on these open cans. One way to get there is through solid amping. Another way is to employ help from the materials within the shell. Having applied cocobolo shells to vented and damped Grado, I've enjoyed the best of both worlds, though that's admittedly not the case for people who don't mod.
Modding does color my perception of Grados. If I couldn't mod the 325, I'd hate it unless I amped it well. With mods, however, the 325 is absolutely amazing. I modded one, some months ago, and lost hours of sleep because I couldn't get myself to shut it all down and go to bed. My views of other cheap Grados are similarly colored by my ability to mod. The SR60 is a fun and decent headphone for $79, though its limitations are all over the cushions, the undamped shells and the plastic, itself. Properly modded, however, the SR60 is utterly amazing. The $200 SR225 is a much better headphone unmodded, and I liked it very much before I modded it into a higher bliss. The HF2 is a beautiful headphone with a terrific sound. The PS1000 speaks for itself. I've owned every Grado in production - except for the SR125 - and I like them all, but like them better knowing what can be done with them.