@mudfinger saidI think it's overrated in terms of being the first "concept album" as the concept was very slight, i.e. it's not The Beatles but Sgt. Pepper's Lonely Heart's Club band appearing on the record.
I'm a real big Beatles fan but thinking about the bands and their albums that I listened to I have to agree with you. The Pepper myth was built on hype.
However, I don't think its overrated musically, it's still a very strong collection of extremely diverse songs which have been meticulously arranged and produced. It's Paul McCartney's answer to the Brian Wilson's "Pet Sounds". It's a pity that "Strawberry Fields" and "Penny Lane" are omitted from the album, although they were recorded during the same sessions.