No they didn't do anything wrong which is sort of the critique. The show depicted the other nations as having their flaws and problems, but was ultimately still respectful which is good. The water nation was sexist, the Earth Nation was oppressively, the fire nation is racist and propagandized.

But the air nomads? There was no real lesson or nuance there, they were just depicted as this perfect, lost culture. Which would be fine if they just didn't want to get into that, but by naming people after the Dali Lama they are sort of making it political, and essentially endorsing feudal Buddhism and connecting it to the real world.