Actually, I agree that Prestige Classes were a poor idea, but not for anything like the reasons the OP described.
My big issue was that most PrCs were intended to represent some sort of society in the game. So, you didn't just pick up the class; you were assumed to be inducted into the order, given access to the mysteries, and so on.
The problem was that in order to join the order you had to be at least 6th level (or thereabouts), and within the framework of the 3e rules characters of 6th level were already somewhat superhuman - they were the Lancelots, the Aragorns, and the Batmans (Batmen?) of the world. They were generally amongst the most powerful individuals in the region, they're even more unusual for there being an entire group of them... and now there are supposed to be enough such characters for there to be entire societies of such characters? And not just one such society, but many?
Basically, the demographics didn't work.
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For all that, I didn't think the mechanics of the PrC were inherently flawed - classes are just building blocks for modelling a character, so what does it matter if a character had one class, four classes, or twenty classes for that matter? (Granted, the balance was often not right, but that's another issue again.)
And I didn't even think the concept of the "society you join and gain access to their secrets" was a poor one - just that those should have appeared at much lower level (maybe 2nd, or even 1st), and could perhaps have been modelled better with feats (or even 2nd Ed style kits).
Ultimately, though, I was never a fan of PrCs. I felt that 4e's Paragon Paths and Epic Destinies did a better job of expressing a similar idea. And, even then, I felt the same could probably have been better modelled without any sort of a "modified class" at all - just give access to the feats, powers and class features themselves, and let the player get on with building the "best fit" for the character he has in mind.
