The acting is certainly not top notch. It's bearable and I feel there are some performances people over scrutinize, but could you honestly tell me that Baron von Grossface was a brilliantly played role?
The reason that the movie is engrossing is because of how the elements, with some very good and some very bad, meld together to create a one of a kind experience. It's certainly not one of the worst films one will see as a connoisseur of cinema, I can say that much.
You are, of course, right that the acting is not great from an objective point of view. What I meant with great acting is, that the way the acting it, it fits the movie perfectly with its strangeness.
No, really, I think it's great!