The people calling this game a tech demo aren't necessarily wrong. Half-life 2 runs on a (at the time) brand new proprietary engine, one that Valve is 1000% confident in. The Source Engine would, in fact, come to define the aestethic and brand of most of Valve's titles. Technology-wise, Half-life 2 is one of the greatest successes a single company could hope for, one that partly built the Valve we know today.

It would be dismissive to call the game just a tech demo, when it is a complete experience; one that is propelled forward by the new tech. The gravity gun is the perfect example. One can play the game entirely by only busting it out during puzzles (Citadel aside, even Ravenholm could be beaten without using it to throw a single sawblade against a zombie) but the fact that it can become one of Freeman's most lethal weapons makes it incredibly fun to use.

That said, it may be a bit puzzling as a sequel to 1998's Half-Life. That game was very action-focused, putting the player in situations where thinking fast and applying the right tool to the right situation was necessary for survival. In that game human enemies were bloodthirsty, cunning and lethal, which coupled with their robotic patterns of speech, made them somehow more terrifying than 2's Combine. The latter are scary at first, when they chase you around City 17 while you are unarmed; but as soon as you pick up a weapon they are revealed to basically be meat puppets, losing all sense of presence as soon as their health drops to zero, their bodies flopping to the ground in an unintended comical way. 2 must know this, as it relies mostly on (very strong and memorable) setpieces that take center stage and where the enemies are just a part of it. Half-Life 1 had plenty of setpieces (the fights against black ops assassins, the bridge and cliff sections in Surface Tension spring to mind) but in 2 they are more varied, thanks in great part to the inclusion of drivable vehicles.

Story and characters change drastically in the sequel. Where 1s plot and characters were in large part flat and one-dimensional, 2 fleshes out its supportive cast, flexing its impressive facial expressions of the Source Engine.
The character who instead loses the most from this exchange is Gordon Freeman. Where in the first game he had complete freedom to act in the structure he's given (the messiah that saves scientists and guards alike, the psychopath who murders his peers with glee, the opportunist who will kill a guard in cold blood for ammo or a gun) is now flattened into an infallable saviour of humanity. I won't argue it is bad for the story, but for ceratin players it may hurt their immersion, which is bad in itself.

There is also a throughline between the two games, the hallmark of a good series: the iconography. It's no accident that something as simple as a black and red crowbar has become an iconic symbol; not simply because it's an unorthpdox fps melee weapon, but as a tool that both games give you plenty of targets for, whether they be boxes, planks or headcrabs. It also smartly maintains the amazng sounds of the first game: the medic and HEV stations and the original voice actors for Kleiner, Barney and G-man.

I want to conclude this by talking about the latter figure. He (they? It?) is the only character that has a consistent and consistently compelling writing in both titles. The first game's blockiness and voice performance made him even more alien than the rest of the cast and the game's quirks only amplified that. Half-Life 2, despite its marked improvements in the graphics and fidelity department, continues the tradition by finding even more visual tricks to maintain the mystery of his character, shedding just enough light in his plans while not revealing all of its hand regarding the big monster and puppeteer of the franchise.

Half-Life 2 is a triumph. One that Valve is still scared to follow up properly. Hopefully Alyx is a sign of things to come. Hopefully we can all one day play Half-Life 3.