Yes, OI definitely should have been given to Misty instead. Yes, there definitely could've been more done to flesh out her ambitions and her goals. The fact that she was such a feisty girl with a fiery personality at times but was an ardent water pokemon trainer represented such a unique dichotomy that I haven't seen in any other character.
I see a lot of "Misty being handled badly in johto" why do I only ever hear about how Misty was badly written rather than Johto being like that in general? All three protags are just kind of there in a lot of it, even Ash to an extent, he gets his hero moment against TR and that's pretty much it. I like Johto, but I def think a lot of time spent "character of the day" fillers could have been put to better use.
Lets not forget AG was also very filler heavy, and nothing caught my interest.
The mistreatment with May comes into play when she herself got too good at contests way tooooo quickly. She seemed pretty much like a Mary Sue type of character and never really struggled much in her contests. It always seems like she passed the appeal rounds without any big problems. I really think that she should have lost in her last Kanto contest tbh, even though Team Rocket and Harley sabotaged her appeal, I still think it was very much unrealistic for her to pass to the next round, when a year or so later in DP Dawn didn't even pass the appeal rounds, not once but twice and she never fell or had any slip ups that May had in her last Kanto contest. Also in the battle rounds, it almost seemed like she always won in some kind of cheap DEM way imo. It really felt like things were always handed to her easily and she really never had to work much at anything. I would have loved to see her fail in some of the appeal rounds in her contests, especially her last Kanto contest and for her to fail some more, so that she could actually learn from her mistakes and develop more as a character.
Due to this mistreatment I really felt that May never really grew much as a character. She stumbled into contests and almost instantly mastered them pretty early on, because of course she couldn't go on disliking Pokemon for the entire season. Dawn, by comparison, really struggled: she went through loss after loss, had to get her priorities straight, and there was a clear progression in her character and in her strategies, as she spent so much time training - on-screen - with Ash. However May was rarely, if ever, shown training and practicing for a competent win, instead relying on luck, "hax", and borderline deus ex machina for her wins. May is the kind of character who opens the episode with "My Pokemon and I have been training extra hard!".