There's actually plenty of character development in FFX.
I mean you have the two leads who basically do build off of each other. Yuna starts off clearly as someone who is shouldering all the "troubles" on her. She has to, she's Brasaka's daughter. The legacy of that as far as she is concerned has pushed her into this destiny that she herself feels like she has to live up to. I mean the game does constantly remind you of this. Contrast this to Tidus who also is suffocated with the legacy of his father, but instead he just hates his father but has never found closure in it. So he understands Yuna and they can relate. It's just that Yuna needs that push, that reason to strike away from this destiny she's forced on herself. She needs to stop sentencing herself to death. Tidus does that, in part because he dosen't no any better, but also because he's just a constant source of inspiration to her, to everybody. That's why I like Tidus, he's the most carefree, nice and inspirational lead in the modern 3d FFs. His spirit rises everyone to fight this system basically. Yuna already is a pretty strong and dedicated person, but in the game she actually becomes a hopeful and strong person. She also becomes her own person, because a lot of what she's been doing in the game is for the greater good and not herself.
Tidus too develops. I think he starts off as a pretty silly and carefree sporty dude. He clearly has father issues in that he can't get out of the shadow of his father(like Yuna). Through his journey though he does find strength, strength enough to say that he hates his father to him. Something he couldn't really do before. But it's also that he realizes that he hates and loves his father. He realizes what his actual problems with his dad was. This is all through his interactions with Yuna. Tidus really becomes a more serious person over the story, kind of coming of age but I don't think FFX is really a coming of age story. He does mature though.
Other characters have their fair share of development.
Wakka is such a narrow minded religious person. Nice guy, but he believes everything Yevon says without reason. When he finds out about Yevon, his life is shattered. He realizes he hate for the Al Behd was wrong. He mellows out really.
Lulu is an ice queen and pretty much can;t get over her past with Wakka's brother. Again, she mellows out and comes to terms with this. Enough to start a relationship with Wakka.
None of this is the best thing ever, but it does have actual characters who have development. Does Auron? No, but he dosen't need to. He's the old man character, but he's done well. A loyal wise old man, but not emotionless. He cares and loves his friends. There is an aspect of bitterness to him as the reality of Yevon did break him somewhat. Still, he just channeled that into a new resolve. Again he's an actual character with a personality.
Rikku is bubbly cute girl sure. Whatever, she's entertaining enough. Kimiarhi is noble proud warrior race. It's weak, but never offended me.
The game has a solid story. It presents a cool world with the death theme cleverly crafted into it. Spira is a well thought out game world. You understand it's politics, atmosphere, people, and history all pretty well. Well enough for the game to feel like something and it's all pretty much in service to the story.
Compare this to a Tales game where the worlds all feel like the same generic fantasy. Spira feels unique and actually about something.
I like the characters. I feel like the love story between Yuna and Tidus makes sense and is natural. They understand each other because they are very similar and both become stronger because of each other.
I don't know, there's a lot to say about this game. A lot about it that I like. I'm not sure what makes the story bad honestly. I don't think it's the greatest thing ever, but it has enough depth to do what it does. Video game stories are like super hero comic books to me. I don't expect the best writing ever and by definition they are ridiculous things requiring so much suspension of disbelief to work. Good video game stories though give good reasons as to why your suspension of disbelief should work. Good video game stories at least attempt to have some thought out characters. Have a plot that attempts to have some themes or meaning. For the most part I think FFX does and succeeds.