Squadrons do nothing to make the game more interesting, honestly. I never paid them much attention except for the pretty picture on the side of my ship and a difference in the voice actor reading the briefing lines. Other than that, squadrons are really pointless and almost forced the way I see it.
I don't buy the whole "fixing" crap you keep putting up. That's complete and utter bull. The fact that FreeSpace 2 Shivans have beams does not say anything to "override" the canon of FreeSpace 1. Furthermore, Shivan ships are never seen having small beams even in the introductory cutscene of FreeSpace 2, further debunking your bullshit statement. I consider the portrayal of events in FS1 very canon indeed - Nowhere is it ever implied that Shivan ships had beams during the Great War, or anything of the sort.
Embarrassing inconsistencies? If you ask me, I'd say FreeSpace 2 is the one which has the most inconsistencies. The ship designs are woeful - They are uninspired and even have lower-resolution textures than some of their FS1 counterparts. Ship design in FS1 was highly coordinated - Terrans were blocky with mostly grey and metal colours, the Vasudans were tan coloured but with blue on their tech, Shivans were red and metallic. Whereas in FS2, the designs were everywhere, they were ugly and some of them were just downright weird (the Myrmidon comes to mind). For me this completely ripped apart the distinctive characters each of the species had. The Shivans went from being planning, strategic enemies bent on annihilating you to space bugs doing random incomprehensible shit, and the Vasudans.... Well, they became like Terran lapdogs.
Sure FreeSpace 1 had node inconsistencies and shit like that. Be honest - Did you even notice the first time you played?
If you ask me, FreeSpace 1 was more of a universe, while FreeSpace 2 was simply a story. FreeSpace 1's portrayal of the universe was mysterious and unfathomable, almost epic in scale. The three species each had their own distinctive characteristics, and this was underlined by their ship building and battle tactics. The Ancients were truly mysterious, giving a sense of mythology and cosmic importance to your struggle. The events portrayed in FS1 were like stepping stones to the grand (though I'll admit predictable) conclusion. You can tell this by the way FS1 was approached - Interplay had fiction written, there was even a FreeSpace Reference Bible. There were no such promotion for FS2. In fact, FS1 was intentionally left open so that expansions like (the failed) Silent Threat could expand upon the universe. FS2 was never planned this way, and it shows. FS2 was there to tell one story and run, while FS1 was actually supposed to be a universe from which multiple stories could grow. To me, this made FS1 more immersive and gave it that distinctive atmosphere that FS2 never got.