Honestly, what really went wrong is the misunderstanding that the Alien is supposed to be similar to early Paleozoic life forms.Something really primitive, just from another world. I think the transition from that to aesthetically, something that's comparable to how Dracula is seen, is when things started getting, ehh. The alien, as a movie monster construct, is a monster that has generic elements and borrows a lot, but what makes it work is its lifecycle, and its vague appearance as a primitive crustacean of some kind, something you can't really fully make out covered in chitin and metal. The underlying idea is, it's a very primitive animal in the shape of a man, that only thinks about reproduction. Prometheus brought those ideas back a bit, and I'm hopefully seeing a return to that. I'm not saying biomechanic this biomechanic-that, the Alien has those elements but if you go too far that route, you mistake the attempts made on Alien and Aliens.
The point of contention, imo, arises, at the point they stopped considering this in production in Alien 3.