I love the concept of it. I'm currently working with couple of buddies on a mod that's a mix between horde and desktop tower defense and class based teamplay.
I think the problem is that they just put it in as an extra, saw how good of an idea it was, but didn't have the time to really push it further. You have the 10 waves in all the multiplayer maps, but it grows old pretty soon'ish. Every player in the team is just doing the same, killing enemies. You can help one another, but there's not lot of variety in the end. The enemies are also not that different from one another, they're just the same enemies that you know from the single player game, so a little variety would've been neat.
And from a level design point of view, you'd have to design the maps so that the floods can really take away your space if you let them swarm out - say you have different sections and they can 'flood' a section so that you can't get your ammo there anymore, etc., they'd really have to be designed with Horde in mind.
But that's what Gears 3 is for. Epic is really good at taking a simple concept and fine-tuning it while packing it full of extreme details and graphic extravaganza.
All in all, Horde was probably the best new addition in Gears 2, but it could've been pushed much further, I think.