1) The worldbuilding. There are other, more impressive worlds in SF - Brian Aldiss' Helliconia probably being the best - but the desert planet of Arrakis is a vivid and interesting setting.

There is of course one massive scientific flaw regarding Arrakis which is so huge it took ten years for Herbert to notice it and have to write a hasty retcon to explain it. He'd forgotten that with no oceans, Arrakis should not be able to harbour human life, and had to later explain that the sandworms fart out oxygen as part of their life cycle, which convinced absolutely no-one.

2) The epic scope of the events, the large number of characters and the clearly-delineated factions. I've seen a suggestion that DUNE works on the same level as FOUNDATION, but took the epic scope of FOUNDATION and encapsulated the same sort of story on a smaller scale and across a shorter and more manageable period of time.

3) The non-conventional characterisation. Paul is not really 'good' or 'evil', he is just who he is and the story revolves around his actions. He is seen as a hero by some, but his actions result in billions of deaths. When people blindly follow Paul, he angrily castigates them for not thinking for themselves. Paul is a complex protagonist, unusual in mid-1960s science fiction, especially in a book that was essentially a space opera.

4) There isn't really a happy ending at all, for anyone. Even if you just take DUNE itself and ignore the sequels, it is made clear that the cost in lives that will follow Paul's victory will be of staggering proportions.

5) These factors combine to present a book that appeals to a vast number of people outside the genre as well as within it. Just as some people never read any fantasy at all apart from LORD OF THE RINGS, a lot of people read DUNE and no other SF in their entire life. This results in the book's place in the SF pantheon being somewhat overblown, as some more interesting works are overlooked in favour of this one.

Overall, I would say that DUNE is a remarkable, almost unique kind of novel with a complex series of thematic and literary messages that Herbert is trying to get across under the disguise of an epic space opera/fantasy adventure. However, just because it is the biggest-selling SF novel of all time does not mean it is the best.

DUNE also heavily inspired STAR WARS, to the point where Frank Herbert sued George Lucas for plagiarism and forced him into a somewhat humiliating out-of-court settlement, which was pre-emptive payback for the occasions when Lucas would sue someone for making something that even vaguely looked like STAR WARS.

And of course, without DUNE it is doubtful that WHEEL OF TIME would have unfolded the way it did either. The inspiration is very strong and clear in places (although this is sometimes overstated: Jordan no more ripped off Herbert than he did Tolkien, but the homages get a bit overt at times).