The thing that worried me most in Season 1 about him "Ryan Murphy"-ing it up was him sort of shoe-horning in one of his frequent AHS actors in a way that felt vaguely off, but that actor/story line is gone for Season 2, so it seems to be holding up for me so far (also Season 1 got better as it went on and that story line seemed to diminish in favor of things that are front and center here in Season 2, at least to start). I'm another person who has bounced out of RM shows in the past after a season or two when it went off the rails, but so far, this feels fairly solid to me. And, for what it's worth, critics I generally trust who have seen more episodes of this season seem on board, too.
As for this episode, starting with Hart Island gutted me (I had seen the pictorial history linked to above before), but did do a good job of setting the tone of the times -- it took me back to that feeling of panic/heartbreak/horror that surrounded HIV/AIDS then. I love the optimism in the face of that shown by so many characters, but then it makes me melancholy since I know how the big picture things really turn out. *sigh*