Regarding the low rating:
Like CaptHappy said, the whole Michael-in-bed-with-the-prosecution story is a strech, and it's not exactly an original idea. But there's more going on that makes this episode sub-par. First, the whole Surely Funke thing... what the hell was this? Did the writers have a hard time coming up with ideas for Maeby or what? I mean she can be harsh at times, but pretending to be a sick kid just for money and to bum everyone out at prom when Surely dies.. that's just cruel. And I think George-Michael didn't handle it very well (and what was with the whole broken arm thing?)
Other than the writing (which for some reason seems dumbed-down), I think another reason people hate this show is because it was sort of a "sell out" episode... a big guest star which got a lot of publicity (seriously, Fox promotes the Julia Louis-Dreyfus episodes more than any other episode), AND it aired after American Idol, which is such a "pop" mainstream culture show--a complete turnaround from the "cult" show that is Arrested Development.
That being said, I still enjoy these episodes every time I watch them. "Alter Egos" may be the worst episode of Arrested Development, but it's still 10-times better than the best episode of shows like Friends or Everybody Loves Raymond.
What is wrong with you?
I'm on mushrooms! I'm on bad... mushrooms!