Almost every other Win98 game I have both in retail and GOG formats either had no problems to begin with - Fallout
Maybe I have a different edition of Fallout, because my CD version had an installer that would not work in Win7 64bit, and the rainbow colors problem. I presume the GOG version fixes both of those issues, no need for additional third-party fixes or workarounds.
GOG versions have also fixed issues for many other originals I have, e.g. I was unable to get Return to Krondor FMVs to work in Win7.
or the GOG version has precisely the same problems with modern PCs as the original retail version does - Rayman 2 with no proper gamepad support, Atlantis with its speed issues, Atlantis 2 with its crashing to desktop, Commandos with its sound issues, Neverwinter Nights with its water issues, Gothic 2 with its performance issues - the list goes on.
So do you think GOG shouldn't have released e.g. Rayman 2 at all, until they are able to code "proper gamepad support" into the game, whatever that means? Is the game not playable on PC without a gamepad? If this is some kind of "X-Input versus DirecInput" issue, I think GOG can't do much about it.
I would try to separate severe bugs from e.g. small graphical issues or other things which really have very little effect on the game. I'm not sure if the "sound issues" and "water issues" you mention above make the games pretty much unplayable or at least very distracting, or can be detected only with a magnifying lens.
Also, in-game bugs that were there already when the game was released are something that can't be really blamed on GOG, and should not be the reason to block GOG from releasing the game. For example, if GOG ever releases Magic Carpet 2 here, I presume people will be bitching that the game may crash on some of the busiest levels.
But the thing is, IIRC the original game does that too, both when running in DOSBox, or even in a real MS-DOS machine. But someone playing the GOG version today couldn't really tell if the problem is in GOG's territory to fix, from his point of view the GOG version simply has an issue, and a pretty bad one too. Obviously GOG cannot probably fix issues that the source code had. So, does this mean that Magic Carpet 2 should never be released on GOG either?
I'm all for mentioning known (major) issues in the gamecard though, just like they have done with e.g. Dungeon Keeper 2 already. But it seems people's threshold for these issues are quite different: some will not tolerate even the first minor graphical glitch, for others it is already worth it that GOG has been able to make the game run pretty good on e.g. Win7 (e.g. Dungeon Keeper 2 for me, even though I have ATI hardware which is affected). I'd hate to think that GOG wouldn't have released DK2 due to the remaining issues.
So far, I've personally been surprised how minor the issues in e.g. Gorky17 and Dungeon Keeper 2 are. Reading the bitchings before, I was under the impression that they'd be pretty much useless in Win7. Far from the truth. Yes, there are some minor issues on many systems. Minor.